Financial advisor – What value does it bring to your company?

financial advisor

This is a good discussion that could easily make it into a full article, however, for many companies especially SMEs this is not even relevant. Why? Because they can’t afford a CFO and therefore they make do with an Accountant. It’s not to say that this role cannot add value to a company but typically it is focused on operational or tactical matters and completely miss out on providing strategic insight to the business owner or CEO. Also, the role would be very focused on the accounting side of the numbers and have little business understanding. In this case a lot of value potential is lost in the company which a true CFO could have prevented. So, why are we even discussing this you may ask? That’s because now there’s a new option on the table.

“The Virtual CFO”

There’s no doubt about the fact that value creation is the most important aspect of what Finance should be doing. Granted there’s also a compliance and controller role to fill and that’s why no company can successfully get by without having at least an accounting or bookkeeping function attached to the company. However, with virtual CFOs around, every company can now tap into strategic and business insights from seasoned finance professionals who know how to advise and partner with business leaders and help them make the best possible decisions for their companies. CFOs have the responsibility and the capability of seeing the big picture and helping businesses to align strategy and finance. CFOs manage performance through analysis of the numbers and coupled with the knowledge of the business, present recommendations to management or the functions they partner with. They can present several options but typically they should present a recommended option. Management will make its decisions based on the recommendations and the CFO will assist in the tactical planning of the initiatives resulting from the recommendations. At this point they leave it to the frontline to execute on the initiatives but follow up on a monthly or any other agreed upon interval in terms of if the initiatives yield the expected results. This takes them back to performance management. If the initiatives yield the expected results then there is no need for additional actions.

However, if things are not moving in the right direction they should discuss with the frontline and present new recommendations for corrective actions.

At Midridge, we are positioned to work with and support forward-looking businesses that want to transform and improve the financial performance of their company, make better decisions that are guided by facts and numbers and make quantum leaps in profits. Contact us today for a free high level business diagnostics review of your business. we are a financial advisor consultancy firm.

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