The operational and strategic CFO: tailoring financial leadership to achieve your goals
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- Operational vs Strategic – what’s the difference?
- Operational CFO services
- Strategic CFO services
- The impact of financial leadership
- What’s next?
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The decision has been made – you need financial leadership to continue with your startups growth. Whether you need advice on daily operations, or you are looking to strategically position your company for growth and acquisitions, our CFO services are designed to meet your every need.
1. Operational vs Strategic – what’s the difference?
Let’s start at the beginning – what’s the difference between the roles? While they share similarities, there are some differences to know about. Here’s a very brief overview:
Operational:
The operational CFO takes care of the day-to-day ‘getting stuff done’ finance, freeing up the founder to focus on other aspects like developing products and generating sales
Strategic:
The strategic CFO focuses on high-level financial strategy, and includes things like forecasting, market analysis, and strategic planning to support business growth and scalability
2. Operational CFO services
Our operational CFO services:
- Strategic financial planning: developing financial models and forecasts aligned with strategic goals to guide growth and performance
- Cash flow management: maintaining a robust cash flow allowing the company to fund growth initiatives and handle liabilities effectively
- Cost management and efficiency: optimising cost structures to boost efficiency and profitability, ensuring the company operates leanly and effectively
- Risk management and compliance: implementing comprehensive risk management strategies and ensuring compliance with all relevant regulations
- Integration of systems and technology: overseeing the adoption of scalable financial systems and technology ensuring growing data and operational needs are met
- Leadership and advisory: providing strategic financial advice to the CEO and board, driving decisions that enhance value and ensure fiscal responsibility
- Stakeholder relations: facilitating communication with investors and financial partners to maintain confidence and support for the company’s strategies and growth
Operational CFO case:
Our client came to us with a primary objective of enhancing inventory management. They wanted to improve their profit margins, prevent stockouts, and to address dissatisfaction from customers who weren’t able to buy what they wanted, when they wanted. After listening and reviewing the current processes, we were able to develop a robust system for tracking inventory levels and sales transactions, and automated integration between the inventory management system and third-party logistics.
Here’s how it improved business for them:
- Optimised inventory turnover and increased profitability by focusing on higher-margin products and ensuring popular items were adequately stocked
- Provided real-time insights into which products were selling fastest, and which offered higher margins
- Ensured accurate and timely data on stock levels, helping to prevent overstock and stockouts, and in turn preventing grumpy customers!
3. Strategic CFO services
Our strategic CFO services:
- Periodic reporting of actual results compared to budget/forecast, and offering insights into key drivers and performance metrics
- Engaging with other leads/business partners such as people, data and analytics, to make sure operational efficiency and achievement of key operating metrics, or identification of risks of underachievement
- Underscoring the importance of embracing and integrating advanced technology within the finance and accounting functions by developing a robust technology roadmap
- Capital structure and investment decisions: balancing debt and equity to fund expansion while maintaining financial health
- Acquiring or selling advice: structure of the deal i.e. asset sale or share sale
- Due diligence: conducting thorough tax due diligence to identify existing tax liabilities, ensure compliance with tax laws, and evaluate the historical tax positions of the target company
- Planning for the tax-efficient integration of operations post-acquisition, including the alignment of tax strategies and the consolidation of tax reporting and compliance processes
- Strategising the most tax-efficient way to structure the transaction, which may involve creating new legal entities or reorganising existing structures to optimise tax outcomes
Strategic CFO case: our client got in touch with the goal of optimising key financial metrics to enhance the company’s attractiveness to potential acquirers, so working closely with them we provided strategic insights and adjustments to develop detailed financial models.
Here’s how it improved business for them:
- Determined the optimal number of broker seats to maximise annual recurring revenue (ARR), which was crucial for demonstrating the business’s growth potential to prospective buyers
- Calculated and managed churn rates to levels that would be acceptable to acquirers, showcasing stability and predictability in revenue
- Forecasted when to deploy capital to hire staff and marketing spend
- Positioned the company as an attractive acquisition target, with clear financial metrics that aligned with acquirer expectations
4. The impact of financial leadership
The targeted financial strategies implemented by our CFO team at Standard Ledger have led to business improvements across many industries, whether that be the enhanced inventory management resulting in better stock control and profitability, or the financial planning increasing company valuation. These examples show our commitment to providing specialised and effective financial guidance that meets the specific needs of our clients, paving the way for their success and growth.
5. What’s next?
Maybe you have seen something here that would be helpful – or maybe you are not quite sure what you need yet. Either way – we can help you navigate your financial journey with precision and foresight. We’ve helped hundreds of startups across many sectors achieve the next step along the path, so get in touch to explore how we can help!
BOOK A CALL with us for a chat, and get your business ready for the next stage of growth.
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