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Home » Business, Finance, and IT Consulting » 12 Reasons Why You Need a Finance Consultant (Temporary CFO)

12 Reasons Why You Need a Finance Consultant (Temporary CFO)

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No matter how small your company is, it would benefit you to have a finance consultant to help organize finances and track performance. Most small-to medium-sized businesses can’t afford the six-figure salaries that come along with hiring a CFO, so a temporary finance consultant is the overall best solution when it comes to effectively running a successful company. Here are several reasons why you should consider retaining a finance consultant:

1. You want to increase your profits more rapidly. All business owners would like to increase profitability and control expenses. However, increasing profit isn’t as easy as it sounds. It requires a professional who has the tools, knowledge and the software to guide a business through the process.

2. You would like to have a better understanding of cost of sales. In a competitive marketplace, controlling the cost of sales is a key aspect to the success of your business. Quality control, customer service, and negotiation for the best possible payment terms with vendors are steps you can take to ensure reducing the cost of sales. Additionally, you can optimize the shipment process, optimize packaging and evaluate the pricing of raw materials.

3. You have never done an analysis of total revenue vs. unit sales. Your business may experience a significant increase in total revenue due to a price increase and you may be presented with a false picture. Tracking the sales numbers by unit will give you a more detailed view. This method of tracking will give you a chance to track if customers are returning your products, or if you need a more involved comparative analysis.

4. You need to have instant access to your business’s financial position. Business owners must make an effort to prepare their monthly financials such as income statements, balance sheets and the cash flow statement. Even if it seems to be all Greek, the business owner must know the numbers to properly direct the business. A finance consultant can make sense of those numbers in plain language.

5. You want to know the liquidity of your company. Understanding your cash position is vital. That’s why business owners should reconcile their bank statements monthly. Your bookkeeper or accountant should make sure that the general ledger agrees with the statements, meaning that all deposits and withdrawals are matching. For example, if your bank statements show a $2,500 withdrawal, that should be reflected in your ledger.

6. You want to manage your inventory. Keeping track of the items in your shelves or in your warehouse takes expertise. If you have inventory that you purchased last year, and it’s been sitting idle, that inventory should be discounted and turned to cash immediately. Buying too much, or insufficient, inventory may hurt your business. A finance consultant will help you work through the details and find an equitable balance that works for you.

7. You are challenged with understanding your company’s break-even analysis. Knowing your monthly expenses (both fixed and variable costs) will help in setting monthly goals and sales expectations. A business owner needs a cash flow projection to cover all expenses. Based on the above analyses, there may be a need to slash some expenses, to launch a new advertising campaign, or look into a new, less expensive supplier.

8. You want to have a better understanding of your company’s payroll expenses. There should be a direct relationship between payroll expenses and revenue. Businesses may face an increase in labor expenses and it may be necessary to adjust the payroll or increase the sales costs of products and services.

9. You want to know if your business is projected to succeed. If your business is not netting an adequate profit, adjustments need to be made to assure that your business is worth your time and energy. A finance consultant has the business financial expertise to assist you in turning your business in a more profitable direction.

10. You want to posture your business for lender assistance. Wouldn’t it be nice if lenders called you to offer you loans? A finance consultant will help you position your company to fulfill your business’s financial needs. They will help you prepare a winning loan package that will get you the funding you need for your business.

11. You wish to make financial decisions on solid advice. Most business owners have no finance background. Therefore, they make decisions based on a “gut reaction.” A finance consultant will assist you in creating a solid foundation to make the right decisions.

12. You don’t have time to keep up with technology advancements that are applicable to your business. Bringing extra efficiency, more efficiency and maximum protection to your business is a must. However, if you are running your business, you have little or no time to think about these essential parts of your business. A financial consultant will ensure that your company is staying competitive in the field of technology.

A finance consultant will provide support and help to avoid some of the problems your company faces in today’s economic climate. Getting your company ahead and bringing more profitability to your business is what a finance consultant does best.


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