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Ottawa, July 6, 2009
Contract CFO – Central to Your Company’s Success in the July/August 2009 issue of Construction Comment.

Your business is growing, your accountant is busy looking after day-to-day transactions, and you need help making those critical and strategic business decisions. Maybe it’s time you added a CFO to your “C-Suite.”

A Chief Financial Officer (CFO) is central to any company’s success and brings an integrated perspective to an organization. A CFO is not simply a financial resource but rather a professional partner able to unite all departments of an organization including operations, sales & marketing and finance. A CFO will make appropriations, authorize expenditures, and set your company’s financial direction.

Typically, CFOs are employed only by larger enterprises with complex infrastructures. All organizations, however, regardless of size, can benefit from the top-level advice and services a CFO can provide. In fact, no major business decision should ever be made without input from an experienced CFO.

In smaller organizations, fiscal responsibilities tend to be shared by a firm’s accounting department and financial institution. This arrangement is problematic as there is often little communication between the two sides. Unless an organization’s finances are synchronized, it cannot expect to grow. 

Most business owners can see the benefit of having a CFO, but can’t afford to employ one on a full-time basis. What they need is a “Contract CFO” – someone who can provide the practical advice and strategic insights of a CFO, but on an as-needed basis. Your business’ needs and life cycle stage will determine the level of engagement you require from a contract CFO. Some organizations may need regular assistance, while others may need advice on a bi-weekly basis. Frequency aside, a CFO’s involvement must be continuous.   

A Contract CFO will perform these and other services:

• Act as a business partner and advisor to the business owner
• Participate and lead in the decision making process
• Develop and oversee budgets
• Secure a line of credit or other credit facility
• Manage accounts receivable and accounts payable
• Prepare financial forecasts and manage cash flow
• Develop and deliver financial and operational management reports
• Attend key meetings with clients, bankers or investors
• Manage banking relations
• Assist with risk management and governance
• Develop tools to provide both operational and financial information
• Implement IT finance systems
• Focus on performance measurement and performance improvement

A Contract CFO’s toolkit includes, but is not limited to, the following items:

• Benchmarking tools to compare an organization’s performance to the performance of best-in-class (i.e. world-class) organizations
• Activity Based Costing tools that will assign costs to a product/service based on the activities consumed by that product/service
• Customer Profitability Analysis tools to determine which customers are profitable and which are not
• Performance Measurement tools to establish useful measures of performance that will support and align with the organization’s strategic objectives
• Scorecard tools to track the overall performance by using financial and non-financial indicators and connecting these to the organization’s strategy
• Business Process Redesign tools to improve processes that will reduce costs and cycle time and increase customer satisfaction
• Ethics tools that will help an organization develop an internal ethics program to increase control, encourage the effective use of resources and improve productivity

WelchGroup Consulting’s Contract CFO service provides owner-managed and owner-operated enterprises with the competitive advantage of larger organizations without the associated costs. Our team of experts brings extensive knowledge and experience to solve a variety of financial challenges. Whether you require assistance in treasury, controllership, reporting or planning, WelchGroup can help.

Organizations that invest in a Contract CFO will see improvements across all of their departments, not just in finance.  

Dragan Veljovic, M.Sc. (E Eng.), is Past President & CEO of WelchGroup Consulting. He brings over 20 years of international leadership experience in the public and private sectors. 

The commentary contained herein is not intended, nor should it be relied upon, to replace specific professional advice. It is recommended that readers consult their professional advisors regarding any matter addressed in this publication.