Role of a CFO for better Financial Management for SMEs

06/05/2022
CFO Services
Role of a CFO for better Financial Management for SMEs

CFO, which is an abbreviation of Chief Financial Officer, is a senior officer who looks after the cost accounting, management, Long term, and Short term investment goals and decisions, budget planning, analyzing the Cost capital, and also looking into the flaws in it, Performance, evaluation and so on...

In short, A CFO has a complete idea and also looks after the Company's Financial matters or operations, which include both internal financial matters as well as external matters.

The main role of the CFO is to ensure the financial discipline while analyzing all the internal and external matters of an Enterprise or a company.

CFO services 

CFO services are provided to SMEs and startups by well-experienced CFOs or financial professionals who are highly in need of an advisor as well as an expert in the issues that arise in the financial matters in organizations but do not have a huge budget to hire a private full-time CFO. So, to ensure to have all the services that a CFO does but at a low cost, we opt for CFO services i.e., instead of buying something that is needed and is not affordable we look after other methods of getting the work done by it without actually buying it, one such method is renting, where we use it at the time needed and then return it. The same way CFO services work, we will get professional services without actually hiring them. Since there will be budget issues for even little things in Small and Medium-size Enterprises, this best helps in saving some money for the firm. 

The prime areas of CFO Services include:

  • Strategic Planning of all the financial matters.
  • Budget planning, Break-even Analysis, and Forecasting (Flow of Cash, Progress, Profits, etc.,)
  • Business Planning, Management, and Modeling.
  • Analysis of Business Models, Profits.

As there is rapid growth and change that is happening in the field of technology, there is an introduction to new CFO services which are named the Virtual CFO services.

Virtual CFO services provide the same CFO services or even more through digital means as it can be from an app or a website. Virtual CFOs have become more popular than that of CFO services within a short period because of their flexibility to use even from remote areas and also because of using their time effectively.

A virtual CFO service provider provides almost all the services that will be provided by CFO services.

SME

SMEs are Small and Medium-sized Enterprises that are mostly independent firms, which are established only for profits. It has a turnover of about 5 – 50 crore Rupees for Small size Enterprise and 50-100 crore Rupees for Medium size Enterprise. 

As it is said, SMEs are established only for profits, it requires money to run and this money is sponsored by facilitating the loans in a hassle-free, easy process by the banks and governments as well.

Since SMEs are established for profits only, there is a need for CFOs for the Financial Management as they look after the complete financial matters internally and externally. The Chief Financial Officer (CFO) will have complete control over the finance, management, business, growth, and analysis of the Company they are looking into. The prime reasons for introducing CFO Services in SMEs are, to make an improvement in the profits.

CFO services in most cases include providing strategic plans to make the non-profit outcomes into profits, identifying and analyzing the key challenges, and providing accurate solutions, forecasting, Financial Planning, Advisory analysis, Debt planning, Breakeven analysis, and so on companies or enterprises.  To make SMEs get huge profits, all these steps are needed which are provided by the CFO services or by the virtual CFO services.

CFO services and Virtual CFO services are much needed for Small and Medium Size Enterprises that are really in need of an expert in finance or a Finance Professional to help in solving the issues related to the debts, profit margins, profits, losses, etc., and also to help in building a profitable model by analyzing the firm's condition but do not have a separate well-versed budget to hire a full-time CFO or a full-time Finance Professionals.  Even using these services provided either virtually or directly saves almost half of the budget of hiring a full-time CFO but then, we are allowed to utilize all the things that are done by a full-time CFO.

So, for better financial management and an increase in profits in SMEs, CFO is much needed. In some cases, where we cannot hire a CFO, we use either CFO services or Virtual CFO services.

Don't believe me? Try it yourself the leading CFO Services firm in India with Especia once & Hire a Virtual CFO. If you have any other questions, you can write to us at accounts@especia.co.in, Or Call at: +91-9310165114.

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