Fractional CFO – Your Guide to Strategic Finance Management

Are you a small business owner looking to take your venture to new heights? How do you navigate financial challenges while fueling growth? Do I have enough cash for the new project?

Strategic Financial Planning and Management helps organizations forecast their future needs. The worst part is that only 23% of companies execute a formal strategic planning cycle or program. 

Taking the time to plan out your future is critical for business and financial success. For example, cash flow is king. If you are not doing 13-week cash flow forecasting weekly, then you are not managing your short-term liquidity needs for debt service or operations to your strategic plan. 

At Westport Financial, we can help close gaps in your business operating cycle, whether it is accounting cleanup, financial reporting, securing working capital, or managing your business. Our team provides strategic planning and fractional CFO advisory services to protect small business goals and plans.

What is Strategic Finance Management? 

Strategic Finance Management is the art of effectively planning, monitoring, and optimizing financial resources to drive a business’s long-term success. It involves aligning financial goals with overall business strategy to make informed decisions that maximize profitability, free cash flow, and enterprise value.

Westport Financial Strategic Financial Advisory 

Westport Fractional CFO Services helps small businesses build sustainable businesses. We customize our financial advisory services to complement our client strengths and needs. Think about fractional CFO advisory as your dedicated economic leader with the support of bookkeeping, financial analysts, and consultants to optimize your financial performance now and for the future.

Our layered approach of bookkeeping, controllership, financial planning and analysis (FP&A), and CFO service creates a one-stop shop for small business owners’ financial needs. We approach our relationship holistically, managing risks, investments, and business needs. Westport Financial’s CFO advisory services enable entrepreneurs to make informed decisions, optimize their operations, and achieve financial success.

See our previous article, “Strategies for Improving Financial Reporting and Analysis for your Business.”

What is Strategic finance?

Strategic business financial management refers to managing a company’s financial resources to achieve its strategic objectives. The term “strategic” refers to the fact that these decisions should be made with an eye toward long-term planning and growth. FP&A is required for all resource decisions, from corporate investment and succession planning to physical assets and technology.

Financial planning is crucial because it helps you understand where your money is coming from and where it’s going. This information can help you determine what changes might be needed for your business to grow or survive.

It’s important to note that strategic finance is not just about the money—it’s about using your cash flow and working capital to achieve goals and make decisions that will ultimately improve your business and its long-term objectives.

See our previous article, “How to Create and Implement a Financial Growth Plan for your Business.”

How does strategic planning and management connect to financial planning?

Strategic and financial planning are closely interconnected and mutually dependent on an organization’s management. Strategic planning involves setting long-term goals, determining the organization’s direction, and formulating strategies to achieve those goals. On the other hand, financial planning focuses on allocating and managing financial resources to support and enable the strategic plan’s execution. CFO Strategic Finance connects your corporate planning to business plans and guides your business according to updated projections. 

Here are a few key points that highlight the connection between strategic planning and financial planning:

Resource Allocation: Strategic planning identifies the organization’s key objectives and initiatives, while financial planning determines the resources required to support those objectives. Setting monetary goals helps translate long-range priorities into budgeted allocations, ensuring adequate funds for each period.

Financial Projections: Financial planning involves forecasting and projecting economic outcomes based on business decisions and anticipated market conditions. Financial projections provide insights into the financial implications of different options, helping decision-makers assess the feasibility and potential economic impact of changes.

Risk Assessment: Strategic planning involves assessing and managing risks and uncertainties that may affect the organization’s ability to achieve its objectives. Financial planning incorporates risk assessment to evaluate the economic implications of potential risks and develop contingency plans to mitigate those risks.

Performance Monitoring: Financial planning establishes performance metrics and targets to monitor progress toward strategic goals. By tracking financial performance indicators, organizations can assess if their strategic initiatives are generating the desired economic outcomes and make necessary adjustments to their plans.

See our previous article, “The Role of a CFO in Small Businesses: Unlocking Growth with Westport Financial.”

What are the benefits of implementing a strategic financial management plan?

The benefits of implementing a strategic financial management plan include improved efficiency in managing cash flow, increased profitability through better decision-making capabilities and better use of resources (human capital) within the organization. CFO Strategic Finance is about aligning your resources, capital, and operations to your corporate plan and strategy. 

Aligning financial activities with long-term goals enables executives to make informed choices about budgeting, cost management, and economic control, which can enhance profitability and operational efficiency.

Additionally, a well-executed strategic financial management plan promotes financial transparency and responsible financial management, boosting stakeholder confidence in the organization’s financial management practices. This increases trust from investors, lenders, and other stakeholders, helping the firm meet its working capital needs.

Strategic financial management is an integral part of any business, but it’s essential for small businesses. Many small businesses are run by one or two people or a team juggling multiple responsibilities outside the company. And while these companies may have a lot going on, they still need to ensure they’re correctly managing their finances, which means they need a solid strategic plan with the proper controls and reporting systems.

See our previous article, “Small Business CFO: What They Are and How They Can Help.

Westport Financial Fractional CFO – Strategic Planning

Westport Financial Fractional CFO advisory helps small businesses with strategic planning and managing the active program. Fractional CFO services enable small companies to take control over financial and operational performance. We connect FP&A, operations, and management to deliver the desired results of the strategic plan.

Strategic planning helps small business owners optimize their cash flow by making key decisions:

• How will you finance growth or expansion?
• Is the bank willing to lend us money for M&A?
• Are we faced with variable debt or loan covenants?
• What are the hurdle rates for new capital projects?
• How long will it take to build up our organizational chart?
• How long is our cash runway? 
• What are our available sources of liquid cash?

An excellent way to think about strategic finance is like having a map. You can’t just go driving without a map, even if you have GPS! You’ll still get lost and end up somewhere you don’t want to be.

Financial planning enables the organization’s adaptability to changing market conditions and emerging trends, helping businesses respond quickly and effectively to shifts in market dynamics.

See our previous article, “The role of a CFO in fundraising and investor relations.”

Westport Financial Strategic Finance Advisory Services 

The benefits of implementing a strategic financial management plan include increased profits, improved cash flow, reduced risk of failure, and more efficient use of funds. These benefits can help you take your small business to the next level!

You can optimize your business finances by hiring an accountant specializing in small business accounting or using software that provides automated bookkeeping services. Westport Financial Fractional CFO Services provides a one-stop shop for developing the strategic plan and finance strategy and implementing these efficiently. 

Contact Westport Financial Fractional CFO for a free consultation today!