What Can A Fractional CFO Do for Your E-commerce Business?
In any business, good bookkeeping is the foundation of good financials. If you don’t have good data at the beginning, it won’t matter what kind of expert you have working for you, you won’t achieve financial success. After establishing good bookkeeping, what do you need to be successful?
A lot of business owners are curious, bordering skeptical about what a CFO can offer for their business. Most don’t know how a CFO’s services can add value to their company.
While admittedly, every business always has a specific and unique situation, in this article, we attempt to list 4 common services of a fractional CFO.
The first step taken by a newly hired CFO is to make an assessment of your financial status. Is your business in shape? Are you winning? Losing? This is where the CFO will go through your financial history and determine past and present performance. A CFO will use metrics that will determine yearly performance, ad percentage, and post-advertising gross.
The data you will get from the CFO’s assessment will help set up benchmarks for your company and establish a standard on which you can measure future performance.
After gathering all that data, the CFO will apply their industry-specific knowledge to produce customized reporting for your business. The conduct of an independent review will produce meaningful interpretations.
This is where a CFO’s worth can truly be seen. It is through their expertise in an industry that they add value to your eCommerce business. Alone, collected financial data, and even metric results, don’t mean much. But when CFOs apply their knowledge of the industry’s status quo, they are able to create value for you. The CFO will be able to tell if your numbers are normal, good, or a red flag compared to the rest of the industry as a whole.
You don’t want to form estimates in your head that are uncertain, often without basis. It’s easier to manage something when it’s quantifiable. It’s better to have a concrete manifestation of your numbers to get a clear picture of where you stand.
In running a company, the business owner is busy thinking of tactics, whether making new marketing strategies or new product lines. In order to understand the effect of any new game plan, you will need to implement different financial ratios to measure its effectivity. Your CFO can work out the numbers for you, have them interpreted in layman’s terms and relate them to your business’ current and future needs.
The next step is to determine where your client wants to go, how far do they want to take the business. This is especially important when your goals are ambitious. You need to be able to give a timeline of your goals so the CFO can work around it. You can set it by quarter, yearly, or by a given period like 5 years.
Your CFO will need to ascertain whether your goals are realistic for your created timeline.
This is where the CFO determines the next step. A CFO can assess opportunities and form strategies, working around markets, geography, product, and competition. After you have determined your goals, the CFO will work to identify the primary steps you need to take to achieve them. These steps can include setting a cap on expenses, finding a new vendor for better terms, outsourcing talent. This will also call for setting up a forecast and other metrics for future performance.
If you need an advisory partner for your future plans, we are one call away. Meaningful conversations often lead to meaningful partnerships. We can’t wait to make one with you.