For a lot of small to mid-size manufacturing and distribution businesses, there’s a conundrum looming over the accounting department. Often, these departments consist of just a few accountants, possibly a controller or accounting manager. Typically, the business owner serves as the de facto leader.
The team can handle payroll, accounts receivable, and accounts payable — meaning it can handle the most basic accounting functions. What many of these companies struggle with is the inability to plan for the future, forecast opportunities and obstacles on the horizon, and devise strategies accordingly. That’s the job of a CFO, and very few small manufacturers and distributors have one in their ranks.
The reason is that few of these businesses need one. Not full-time. Financial expertise and foresight are important, but small businesses don’t automatically require 40 hours of CFO input week after week. They may not be able to afford it.
That brings us to the conundrum: how does an accounting department hire a part-time executive? Fortunately, it’s a lot easier than expected.
The Advantages of CFO Services
What are CFO services? Think of them as the individual responsibilities of a CFO – things like forecasting cash flow, budgeting/planning, financial reporting, or contract negotiations – available individually and on demand.
When companies opt to work with an outsourcing firm instead of trying to hire a CFO, they get the expertise, specialization, and high-level accounting capabilities their team is lacking, but at a fraction of the cost. Maybe, more importantly, the needed assistance is available now, not whenever a qualified candidate accepts a job offer, which can take weeks or months.
Here’s an example of CFO services in action: Imagine a manufacturer needs to do a detailed costing analysis but doesn’t have the experience or sophisticated systems to get the numbers accurate. Their outsourcing firm provides them with a costing expert who understands the market segment and how costs affect sales prices, gross margins, demand forecasts, and labor needs. As a fractional CFO, the expert gives the company essential costing insights. Then, they return to the outsourcing firm until further assistance is necessary.
With CFO services, small companies don’t need to hire a CFO. They also don’t need to pay exorbitant compensation packages or make do with basic accounting resources that can only look backward. Even better than a part-time executive, CFO services are a kind of anytime expert.
CFO Services Specialized for Manufacturing and Distribution
Exceptional outsourced accounting firms provide two things. First, access to a full range of CFO-caliber accounting services delivered by experienced experts. Second, a serious commitment to tailoring CFO services to the client’s specific needs and changing circumstances.
We have a regional focus with global expertise. The former CFOs on our team come from diverse backgrounds and every facet of accounting, but they focus on individual industries, gaining true authority. So ask yourself, could you use CFO? If so, contact us.