At The Startup CFO, we know that when it comes to getting your startup off the ground, especially at early stages, you might end up feeling totally overwhelmed. Every day is a learning process, and you may find that your day-to-day work piles up, as you’ll have customers, colleagues and staff to attend, and management skills can end up being neglected. This is absolutely damaging for your startup and should be avoided at all costs.
Many budding entrepreneurs think that all management outsourcing is the same and that whichever manager they chose will provide the same service, but in this post we explain the 4 ways in which an expert CFO management service adds value to your startup.
Bad financial management can directly damage your startup
Let’s start with the most serious part. A bad or unprofessional management partner can cause your startup to nosedive or even fail. Why? Because you won’t be able to stay on top of essential elements like reporting and financial statements which could cause your business to stray or even seem amateur with its procedures.
Consequences of bad financial management
- Not filing taxes on time or unpunctuality: a business needs to run like clockwork. If you fall into bad habits at the early stages of your startup, you’ll find it increasingly hard to turn these habits around and could be severely sanctioned.
- Fines and penalisation: lack of punctuality and reporting is likely to cause you to incur fines and penalties when handed in late. And that’s not all: remember that your reputation is more important and it’s difficult to turn-around a bad reputation once people perceive that you have an unprofessional way of doing things.
- Errors and issues with payroll: the last thing any of us want to do is start having issues with our team. Human resources are our biggest asset and people management, including emotional intelligence and wellbeing, is fundamental. However, moving back to finance, many entrepreneurs fail to capture the impact bad financial management can have on these crucial relationships. If payroll isn’t managed correctly, staff will start to take note.
Create a good impression with investors and encourage further investment
A good handle on all of your figures and reporting is going to make an excellent impression with investors. Investors are often overwhelmed and managing a range of different portfolios at any given time. Take a moment to think about the number of badly produced reports and figures they likely endure on a monthly basis, and you’ll understand the value of standing out from the crowd. A good CFO service will make sure all of this information is crystal clear and organised to perfection with a firm focus on investors.
Streamlining financial reporting and timing
A good financial advisor and manager will make sure to deliver your reports on a monthly rather than quarterly basis. As we’ve seen in previous posts, the importance of monthly reports cannot be understated. They are reports that allow you to look at the monthly health of your business and determine factors like CAC and LTV. Considering that many early-stage startups are in a process of rapid growth or change, a quarterly report is not going to be of much use to you or to investors when compared with monthly systems.
In terms of accounting, your books will be controlled and closed in a timely fashion with the information delivered to you ready for use. Reports are only useful if they are workable and able to help you achieve your goals and defend your company in every sense. This really allows for a win-win situation, considering that your investors, clients and employees will be happier in the long run if your company is well-managed.
It goes without saying that a bad management service or CFO might present these reports in a less desirable way and will often fail to give you information in a streamlined, workable format.
A personal advisor to provide extra support
This will inevitably vary depending on who you decide to work with. At The Startup CFO, we offer a personalised, hands-on advisory service we make available to our clients on a daily basis. When starting out, this service is worth its weight in gold. A good CFO service will use its track-record, expertise and experience working with different niches to provide tips, coaching, guidance and maybe most importantly of all: provide backup if you need extra support.
At The Startup CFO, we are passionate about offering optimal CFO management services for early-stage startups with a special focus on SaaS environments. We offer a highly specialised and personalised service through our team of approachable professionals who work with a wealth of experience.
We know that you’re a busy entrepreneur and often get caught up in the daily running and growing of your startup. That’s fine by us: we make sure we don’t intrude, providing opportune consultation and guidance when you decide you need it and working to achieve optimal financial management behind the scenes. Our team of consultants is at hand when you need them the most.
We promote the use of enhanced technology and easy-to-use systems to make the information we manage more accessible, understandable and workable. We set up communication methods and deliveries that suit each client and work together to ensure the best strategy possible to deliver the ideal information.
Get in touch with our team of experts for more information and to have a conversation about your needs. We are passionate about managing finance and coaching entrepreneurs in order to achieve what we are most excited by: viable and successful startups.
para conseguir lo que más nos ilusiona: startups viables y exitosas.
