Identify Cost Savings and Increase Efficiency
In order to stay competitive, businesses are forced to examine all aspects of their operations to identify cost savings and drive efficiencies. The companies that do this successfully will be rewarded with increased market share and improved profitability.
The challenge for small business owners is how to effectively conduct this analysis without the knowledgeable resources to do it. Typically, small business owners will try to handle the company’s finances on their own, even though accounting is not their core strength. Consequently, owners can end up with poor financial reporting that impacts their understanding of their business operations.
Specific results of accounting and financial reporting shortcomings affecting small businesses include:
- Inability to obtain bank financing or raise equity investments
- The financial complexity of the business has outgrown the capability of existing staff
- A lack of financial bandwidth on a specific project such as a M&A transaction
- Inability to respond to growth opportunities due to misunderstanding the relevant financial implications
- Misperceptions about the origin of profitability
Most Efficient Method for Small Business Owners
For many small businesses, hiring a full time CFO or Controller is not economically viable. However, outsourcing accounting, utilizing a fractional CFO or Controller service to access the financial expertise they need is affordable. On average, most small businesses (subject to size) should only spend between $15,000 and $60,000 annually for fractional services, compared to $90,000 – $120,000 annually to hire a full time CFO or Controller. Clearly, utilizing fractional CFO/Controller services makes sense for small businesses who are looking to identify cost savings and drive efficiencies.
Making the Shift: Four Secrets Behind Great Budgeting and Planning
Download the eBook to learn how to challenge the Status Quo; set targets for continuous improvement, how CFOs can lead improvements & how to set rolling forecasts.