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A Guide to CFO Services Solid financial management practices are essential to a company’s profitability. The important question for business owners to answer is if their main focus should be client deliverables or managing revenue well. Getting CFO services can help solve this issue. If you hire CFO services, you accounts will carefully be scrutinized, including profits and losses. Account keeping can easily be neglected by a business whose main focus is to meet client requirements. It is very important that funds be managed well if you are to generate profit. While your customers help in your business profitability, it is not the only thing that makes it profitable. If you manage your costs, reduce unnecessary expenses, and enhance your productivity, then your profits will increase. CFO services can help you find out the factors that are leading to decreased profitability by scrutinizing your sources of revenue, your methods of generating revenue and the costs associated with it. Here are some questions that you should be able to answer about your finances. Do you regular update your account sheets and are they done accurately? Do they reflect profits and losses accurately? Can you correctly identify your overhead expenses? Can some of these overhead costs be removed?
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Overhead may not be directly involved in generating revenue or profit but it is necessary for business to function. Examples of overhead include travel expenses, phone bills, and client entertainment. You might think that the only way to reduce cost is by controlling your overhead, but if you cut too much of your overhead, it can lead to a negative impact to your revenue stream. CFO services can help you decide whether you need to cut down on your overhead or not, and if you are to cut it down, they can help you in deciding how much your need to reduce your expenses.
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Customers who receive an invoice from your business still needs to give you payment. The daily invoices incurred by the business will grow before the month ends. Each invoice represents customers who are debtors of your company. When you hire CFO services, you are better informed about the state of your company’s finances, and hence better prepared to reclaim the money. You can follow up on payments if you fix the limit to a number of days and your customer goes beyond that limit. The competitiveness of your rates, and the optimal use of resources are determine by your CFO services and will give you information on such. Start ups, small and medium sized businesses do not need to hire a full time CFO. Instead, consider outsourcing this function. When you outsource your CFO requirements you receive the dual benefit of direct profitability through smart financial management, combined with savings on investment costs otherwise spend on funding an CFO position in your company.