External CFO

How an External CFO Can Future-proof Your Business?


So many things in business are unpredictable. A spell of bad weather, a global pandemic, a town-wide outage, or escaped cows on the Pacific highway.

There are, however, accounting tools to assist in predicting future financial outcomes.

Financial forecasts focus on a specific part of the business and use historical data and market trends to predict future ones.

A sales forecast estimates the expected revenue from the sale of goods or services over a specific period. An expense forecast predicts the anticipated costs and expenses associated with running a business. A cash flow forecast projects the inflow and outflow of cash within a given timeframe.

Please find out more about financial forecasting in our previous blog.

Constructing accurate and reliable financial forecasts is paramount for business owners aiming to stretch limited resources and make it through off-seasons.

Navigating the complexities of financial forecasting can be daunting for business owners, especially those trying to juggle all the other business commitments with only so many hours in the day.

This is where a Chief Financial Officer (CFO) can provide valuable assistance.

They are hiring an external CFO as a financial advisor who offers strategic financial guidance and support on a part-time or project basis.

They are financial analysts bringing extensive experience and applying proven strategies to a business and helping businesses make informed financial decisions and achieve their goals without the price tag or obligations of a full-time financial analyst.

How Can an External CFO Help with Financial Forecasting?

1. Expertise in Financial Analysis:

An external CFO possesses the necessary skills to analyse historical financial data, identify trends, and make accurate forecasts. They see connections between departments and numbers whilst also having the ability to see the big picture.

They deeply understand financial modelling techniques and can provide valuable insights into your business’s financial future. CFOs are strategically minded and can think within the vision desired.

Through years of experience, they can identify the different angles in the numbers.

2. Scenario Planning and Risk Management:

An external CFO can help you assess various scenarios and their potential impact on your business’s financial health.

Conducting risk assessments and developing contingency plans enables you to navigate uncertainties effectively.

3. Strategic Financial Guidance:

With their strategic mindset, CFOs can align financial forecasts with your business strategy.

They help identify key performance indicators (KPIs) and financial metrics that track your progress towards growth objectives.

This financial advice empowers you to make data-driven decisions and allocate resources effectively.

4. Financial Reporting and Investor Relations:

An external CFO can assist in preparing comprehensive financial reports that meet regulatory requirements and provide stakeholders with the necessary insights.

Detailed reports can identify trends and potential areas for financial improvement. They can also support you in communicating economic information to investors and lenders, enhancing your credibility and access to capital.

5. Cost Optimisation and Cash Flow Management:

CFOs excel in optimising costs and improving cash flow. They analyse your cost structure, identify areas for efficiency gains, and implement strategies to reduce expenses.

Closely monitoring your cash flow ensures your business has adequate liquidity to support growth initiatives. Clout Advisory has developed a free cash flow template to assist with this.


Can CFOs Predict the Future For a Business?

Financial forecasting is among the most widely used tools by CFOs in small businesses. Forecasting offers your team insight into future scenarios based on present-day decisions.

For businesses nearing a cash crunch, having a well-thought-out plan is essential. Every business encounters difficulties, and your CFO can assist you in effectively managing excess during such times.

They may not be able to see the future. Still, they can act as a financial team that assesses your business’s financial performance and the potential outlook for the foreseeable future.

Business owners can make informed decisions and seize opportunities in the dynamic marketplace with the help of external CFO services.

Clout Advisory’s external CFOs can see the long-term impacts of decisions. We can assess the likelihood of risks and steer your business towards sustainable growth faster.

Contact us today to hear more about how our external CFO services can help you. Call (02) 6650 5888 or email us at coffs@cloutadvisory.com.au.

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