For a lot of small to mid-size manufacturing and distribution businesses, there’s a conundrum looming over the accounting department. Often, these departments consist of just a few accountants, possibly a controller or accounting manager. Typically the business owner serves as the de facto leader. The team can handle things like payroll, accounts receivable, and accounts payable–meaning it can handle the most basic accounting functions. What many of these companies struggle with is the inability to plan into the future, forecasting opportunities and obstacles on the horizon and devising strategies accordingly. That’s the job of a CFO, and very few small manufacturers and distributors have one in their ranks.
The reason why is because few of these businesses actually need one. Not full time. Financial expertise and foresight are important, but small businesses don’t automatically require 40 hours of CFO input week after week. They may not be able to afford it, either, considering the high cost of executive recruiting in a competitive labor market like the Bay area.
That brings us to the conundrum: how does an accounting department hire a part-time executive? Fortunately, it’s a lot easier than expected.
The Advantages of CFO Services
What are CFO services? Think of them as the individual responsibilities of a CFO – things like forecasting cash flow, budgeting/planning, financial reporting, or contract negotiations – available individually and on demand.
When companies opt to work with an outsourcing firm instead of trying to hire a CFO, they get the expertise, specialization, and high-level accounting capabilities their team is lacking, but at a fraction of the cost. Maybe, more importantly, the needed assistance is available now, not whenever a qualified candidate decides to accept a job offer, which can take weeks or months.
Here’s an example of CFO services in action: Imagine a manufacturer needs to do a detailed costing analysis but doesn’t have the experience or sophisticated systems in place to get the numbers accurate. Their outsourcing firm provides them with a costing expert who understands the market segment and knows how costs affect sales prices, gross margins, demand forecasts, and labor needs. Acting as a fractional CFO, the expert provides the company with essential costing insights; then he goes back to the outsourcing firm until further assistance is necessary.
With CFO services, small companies don’t need to hire a CFO. They also don’t need to pay out exorbitant compensation packages or make do with basic accounting resources that can only look backward. Even better than a part-time executive, CFO services are a kind of anytime expert.
SSF Consulting – CFO Services Specialized for Manufacturing and Distribution
Exceptional outsourced accounting firms provide two things. First, access to a full-range of CFO-caliber accounting services delivered by experienced experts. Second, a serious commitment to tailoring CFO services to the client’s specific needs and changing circumstances.
At SSF, we have a regional focus with global expertise. The former CFOs on our team come from diverse backgrounds and every facet of accounting, but they concentrate their focus on individual industries, gaining true authority. So ask yourself, could you use CFO? If so, contact SSF and let’s talk about your goals.