IBS Consultants Corporate Legal: Know-how About CFO Services
Financial
management can be a daunting task for new age tech savvy entrepreneurs or SME
promoters with limited financial acumen. Yet it cannot be denied that no
business can succeed without a prudent management of its financial needs and
resources.
To fix this
need, we have new age solutions in the form of ‘CFO services” that can take the
load off the back of many such SME owners/entrepreneurs. ‘CFO services’ as the
name suggests, refer to a bouquet of services typically managed under a CFO and
which need to be managed well to ensure a good financial health of the
organization.
Why CFO Services ?
A very
pertinent question that every SME owner/entrepreneur/startups will have to confront is the need for the CFOservices. In most cases, an Accountant is hired and is expected to manage the
financial health of the Company and also give expert advice. But the result
largely is just data entry, delayed payments, irregular compliances and inspite
of a profitable business, there is cash crush and struggles with working
capital. When these problems arise, they have a negative impact on business
prospects, valuations and fund raising and the growth is thereby hampered.
Maintaining an
in-house CFO with supporting staff can be a drain on the limited financial
resources. In early stages of business, cost is an important factor for
ensuring business viability. This is when outsourcing CFO functions to a
reliable financial advisory partner (CFO service provider) can help boost your business, while at the
same time maintain prudent cost centers. Repeated manpower attritions can
affect the stability and security of a business at every stage.
A reliable
financial advisory partner ensures continuity in business, that is equally critical
to a stable business. Cash flow
management, Accounting, Raising funds, Budgeting functions, statutory
compliance and more can be managed by experts while the entrepreneurs can focus
on their core competencies. CFO services act as conduit and can also help
during the interim manpower changes without compromising on the business
quality. The SME owner can also opt for specific advisory services to be
continued on a long term basis – which further insulates him against any human
resource hiccups.
An in-house CFO
too may need expert strategic advice for certain projects. Your financial
advisory partner can also help with project specific CFO services, as they
cater to a multitude of financial challenges and have diverse capabilities.
Service Areas
The scope of services may vary
between providers but broadly they cover:
- Internal Controls
- Budgeting & Forecasting
- Working Capital Management
- Tax Advisory
- Interim CFO/ CFO Assistance
- Project Management (short term/mid-term/long term)
- Compliances
- Fund raise & Deal Structuring
- Strategic Advisory
CFO service
providers can also help find, analyse, and place full time CFOs when required –
since they have the capabilities to choose the best from their domain.
With a
dedicated financial team, expert insight, greater flexibility, cost efficiency,
better controls & compliances, stability – CFO services are a win-win
solution that matches the goals & expectations for all players in all kinds
of businesses, but a real boon to young start ups.
This article is
authored by Dinesh Makani, representing India Business Solutions (IBS) which is
a boutique advisory firm helping a lot of Start ups, SMEs in India and
Singapore in fulfilling their aspirations. Dinesh is a Managing Partner &
Founder at IBS and can be reached at dinesh@dmibs.in
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