3 Ways a Part-Time CFO Resolves Business Cash Flow Issues

Cash flow problems are one of the most challenging obstacles small business owners in Edmonton face. When you’re running a small business, paying suppliers, employees, and contractors is tough when you’re waiting on payments from customers. When cash flow is running low, there’s a lot of pressure and stress. “Can we make it through?” is a question no business owner wants to ask on a regular basis.

One of the best ways to remove the threat of cash flow problems and make your business more sustainable is to hire a part-time CFO. He or she can help you reorganize the financial side of your business so you can get on with business and get a good night of sleep!

Your Part-Time CFO will Address all Imminent Threats

Typically when a new client brings Schwan & Associates CPA in to begin a CFO role, it’s because there are some imminent dangers to the business and the situation looks dire. Instead of doing whatever they can to stay afloat for a few more months, business owners turn to an expert to help them do more than just bail water out of a sinking boat.

When we come in, there are a few quick patches we can make to immediately turn the situation around and start moving in the right direction. A few ways that a CFO might achieve this include:

• Clearing up delinquent accounts and collecting late payments (and coming up with a solution to motivate customers to pay in a timely manner in the future).
• Arranging the best possible short-term loan with a bank if emergency funds are necessary until the situation is fully sorted out
• Working with creditors to negotiate better terms, extend payment schedules, and develop positive ongoing relationships
• Assessing your current situation quickly and providing you with an action plan and strategy that will help resolve current issues, while also resolving underlying issues so that the business can be sustainable and profitable in the future

Increasing Profit Margins & Auditing Expenses

Cash flow problems can be caused by a number of factors in a business, but one of the first solutions is to look at how your income compares to your expenses. If there are ways to increase the former and decrease the latter, that’s one of the first priorities for a CFO. He or she can offer outside insight into how and why certain income streams are costing more than they’re making and which expenses can be cut or grouped together for better value.

Managing Your Growth Strategy

One of the main drivers of cash flow problems in business is optimism. It’s not that we don’t want you to be excited about business growth, but taking a practical look at what that growth actually looks like is essential. If you double your sales in a year, but you had to take on new employees and upfront expenses, and you’re not getting paid as quickly because the invoices are larger, cash flow problems are imminent.

Cash flow management is an essential part of business growth. An expert financial perspective from an outsourced CFO can help you start your growth cycle with strategies that will be more sustainable in the long-run. For example, categorizing your expenses each month, forecasting income growth, and strategizing your hiring schedule can help you ensure you have money in the bank when you need to.