Manage Business Funds (CFO Hat Mastery)

As we carry on our series today, we’re focusing on the chief financial officer hat in our business, the CFO hat.

The goal is to be clear on exactly what that job even does.

Oftentimes (in a small business especially), it’s the owner still doing that role. It’s much larger before you maybe would bring someone on full-time or fractionally to perform this duty in your business.

We talked previously about one of the key CFO duties is to manage the profitability on a per job basis (that the business works out on paper) and executes in the real world and to track and analyze that.

A second key duty is to manage the actual funds available in a business strategically. That will be the focus of today.

Managing The Income And Expenses In A Business

In a business you have the money coming in but unfortunately it has to go out to lots of places. Managing this flow is important to avoid a traffic jam of money stress.

You have

• Fixed expenses
• Variable expenses
• Tax money you have to set aside
• Setting up things like an emergency fund
• Having operating capital on hand
• Determining when you can purchase new equipment or not
• When it’s time to upgrade things.
• And more..

Consequences of Neglecting Business Financial Management

So there’s a lot of analysis and budget allocations that have to be figured out on an ongoing basis.

Otherwise when it is tax time, you don’t have the money set aside and you’re going to be very stressed.

Or you have an emergency happen, you’re not ready for it, or you feel insecure because you don’t have an emergency fund.

Or you stockpile way too much cash and you’re not paying yourself because it’s all staying in the business and you should be paying yourself because you actually have way more set aside than you need.

It really varies business to business, but a key job duty that the CFO does, (which is probably you in your business) is to

1. Determine strategically what this looks like
2. Make a determination
3. And execute on it.

Are you proactively wearing your CFO hat to ensure these duties are being done in your business?

Best of luck to you.

Have a great day.