Secret Weapons That Strategic CFO’s Use to Grow Businesses

An ounce of prevention is worth a pound of cure.

While no one has a crystal ball or a way to predict the future, there are ways that your strategic CFO can prepare for problems and prevent them before they happen.

Strategic CFO’s Put Guardrails in Place for Growth

Internal controls and policies don’t necessarily sound very “strategic” do they?  

If you are a hard charging visionary, you may get disgusted with these topics because they can definitely slow you down.  What strategic CFOs know, though, is that internal controls, company policies, and procedures exist as guardrails not speed bumps.  

A strategic CFO will put in place this framework of policies to help lower the risk and likelihood of something detrimental occurring.  Once this is in place, there should be little need to worry about things blowing up, especially self-inflicted issues.  Strategic CFOs understand that a good set of policies keeps the company moving and gives everyone appropriate boundaries and rules of engagement.  This is important for shareholders, auditors, bankers, and employees so that they know they are working with a company that rewards integrity and trust.  

One more point on internal controls – strategic CFOs know that going through this process is a great way to find savings opportunities and to take cost out of the business.  Documenting policies and fixing broken processes almost always presents ways to slim down expenses.  You just need a strategic CFO that is open to those possibilities. 

2. Great forecasting Can Be Your Crystal Ball

After your CFO has the basics established and they have a grasp on your business and market, they can focus more on looking into the future and modeling ways that your business will be impacted by certain events.  Most of this will come in the form of forecasting and there are a couple of important types.  

First is the cash flow forecast.  For you to run as fast as you know your company can, you need to have cash available to do it.  A strategic CFO knows this and will immediately put into a place a system to increase cash collections and develop a methodical payment system to create predictability.  This gives everyone visibility to when the company may have excess cash and when there are tight spots.  Building this in advance helps everyone understand and work together to fix the tight spots.  Without this forecast, though, no one knows anything, and this can be dangerous.  

Regular income statement forecasting is also vital to understanding what is coming.  Your strategic CFO should be taking your team through a process at least each quarter to update your budget and extend the forecast out one more quarter.  The world doesn’t stop at the end of a year, right?  Consistently adding a new quarter to your forecast ensures you have visibility into what could be around the corner.

To get this rolling P&L forecast right, your strategic CFO needs to employ and understand the business drivers.  What are those three to five levers that really “drive” the fundamentals of the business?  These should be at the heart of a forecast and not just what you or your team “think” should happen. 

Seeing down the road ahead is much easier when your strategic finance professional can translate your growth plans into actionable forecasts.  This keeps risk at a manageable level and helps everyone understand their part in making your goals a reality.  

Are you comfortable with the visibility you are getting from your finance team?  

Crown CFO consists of experienced and seasoned strategic CFOs that are ready to help you grow your business.  If you would like to talk further, please reach out.