In the previous blog post, we discussed some of the objectives of financial management. Profit maximization is only a small part of what an outsourced cfo needs to do for a company.

The reason people go into business is to make money. In order to make money you need to employ a facet of business financial management that is commonly referred to as wealth maximization. This is also known as maximizing value.

The value of a business is based on the market price of that particular company’s common stock. This market price and the value of the business takes into account the present and possible future earnings for each share. The chief financial officer, outsourced or otherwise, is responsible for making decisions that will maximize the amount of value or wealth that a certain company has. This is a huge responsibility and one that shouldn’t be taken lightly.

This requires knowledge of economic outlook, outlook of a the particular company, technical factors, and even mass psychology. So the chief financial officer is responsible for having very extended knowledge in many different areas. This is why it usually takes a cfo many years of experience and many years of study to be able to do their job well.

A small business might be able to get by without a chief financial officer for a little while, but eventually everyone will need one. Even if it is an outsourced CFO, the business of financial management needs to be taken on by someone.

But why is that? What exactly is the aim or goal of business financial management? This is actually a fairly simple question to answer although it’s usually not done in layman’s terms. If you do a google search for “financial management goals” you could go cross eyed trying to extract any meaning from the articles you find.

In the following few blog posts, I will lay out the goals in simple, easy to understand terms that you don’t need to be an accounting major or a lawyer to garner information from.

First, financial management is about profit maximization. Spending as little money as possible to get the maximum amount of return. If you are a retailer for example, you want to receive your merchandise for a low price and sell it for higher. A financial management officer will be able to tell you the margin for the markup of the merchandise where people will still pay for it.

Being in business for ten years and being in business for ten days sometimes have very basic similarities. You need to know the basics that form a good business financial management plan.

First, and possibly most important to any business or financial institution, practice ethical behavior. With all of the uproar over Wall Street and the recent “Occupy” movements that spread across the country, it has become obvious that ethical practices are not only expected but demanded. This should be the absolute golden rule for any company.

Secondly, you need to write up a realistic budget. If your overhead is high, budget for it. You can always lower your overhead costs later and come in under budget. Isn’t that a better option than being over budget for some silly costs that you should have forseen? Sit down and plan out a realistic budget and stick to it.

Thirdly, locate yourself a quality manager or two. You need to be ready for anything unexpected. If you don’t have anyone on hand to manage your accounts for you, consider an outsourced CFO to do the job for you.

There are so many more principles that companies should adhere to to have an effective financial management solution, these are just three of several tips.

If your company is debating between hiring a temporary, outsourced CFO and a permanent financial management solution, you should understand the difference between the two to make a well informed and sound company decision. Your financial future could depend on the outcome of your choice.

Here are a few basic questions you should ask yourself:

1. Do you anticipate growing over 50% annually?
2. Is your company expecting a huge financial change in the coming year? (i.e. an acquisition or a bank change?)
3. Do you have multiple product lines?
4. Are you in an industry that is heavily regulated and has very difficult tax codes?
5. Do you have trouble managing your company’s cash flow?

Did you answer yes to any of these questions? A good way to tell if you need a more permanent financial management solution is if you answered yes to more than two of these questions. Generally, if you answered no to the majority of the aforementioned questions, you can probably get by with an outsourced or interim CFO.

You can also probably manage your company’s day to day operations by yourself or with a team of knowledgeable individuals on your staff. However, if you plan on undertaking a major project, I suggest an outsourced CFO.

I was just reading over New York Magazines’ “Reasons to Love New York.” Of course, I love living here but reading over these articles always makes me appreciate even more the great city I live in. But it also draws my attention to great deals that I have never heard about before.

One of these reasons to love New York was that there is a restaurant in Williamsburg, Brooklyn that lets you pay what you want for a meal. It seems amazing, right? In the article, the owner of the business said that someone left $80 on a dinner that she would have charged only $30 for. But I can’t imagine that most people overpay. Apparently only one person has paid nothing so far and most people have been “fair.”

What would an outsourced CFO say about this business plan? I imagine that they would cringe at the potential fluctuation in income. There is the potential that you could sell the same amount of food two weeks in a row and have a wildly different profit margin.

Obviously though, this particular restaurant is doing just fine banking on the inherent goodness of our fellow man. I still think that maybe they could do with a little financial consulting.

If your company finds itself without a Chief Financial Officer for any reason, whether temporary or long term, it can cause a series of small panic attacks in even the most steadfast CEO. If no one in your company knows the first thing about being a CFO, tensions can run high, productivity can slow, and all around unease can take over your office.

Don’t let this happen. Outsourced CFO solutions abound. You can let someone else worry about the day to day financial issues and get back to running your company. The Mariner Group LLC offers several financial management solutions to help.

They can offer you interim or outsourced CFO operations solutions. This means, in basic terms, someone outside of your company who is very well versed in CFO operations can run that side of your company while you look for a long term or in house person to take over the position. This person can create benchmarks for your company. These are incredibly important because without benchmarks, you can’t be sure what you’re working toward or if you’re making any significant progress.

The CFO will create investor presentations for your company so that you can continue to gain capital and funding while you’re searching for a permanent replacement.

You’re a start up company with a great idea and a great product.  You’re bright eyed and bushy tailed and ready to take on the world. But without good financial management, even a great idea or great product can fail.

Your ideas are fantastic but your bookkeeping skills are only so-so. You might know a great deal about what the public wants in a product but when it comes to taxes, you’re lost. That’s where outsourced accounting solutions come into play.

A financial management solution company can help with general accounting like bookkeeping and also supply an accountant on an interim or permanent basis. You can let the professional financial advisers help you with things like taxes and accounting and reporting. If you don’t know the first thing about business plan development or profitability enhancement, don’t worry. You don’t have to tackle all of this on your own. You don’t have to take classes and buy books upon books. Learn first hand from the professionals!

Financial consulting is a great way to keep your business afloat or get it started in a world of ledgers, taxes, and dollar signs. This way, you can focus more on the product and the company’s image rather than worrying about what treasury management is all about.

Are you a privately owned company looking for a Chief Financial Officer aka a CFO? Are you a publicly traded corporation looking for the same? Look no further! This blog will offer you some financial management solutions and tips on how to place the best person in the job.

When dealing with a large firm, it is really important, for the sake of the sanity of all of the top brass, that there is a competent, knowledgeable, and experienced person in the job of CFO. When dealing with a start up company, it’s the same story! You don’t want someone untrustworthy or clueless handling the money for your company.

Let the Mariner Group LLC help with financial consulting. They’ll make sure the best person is placed in the position through a rigorous review process and make sure that the person you hire will be able to complete projects on time, and make certain that you’re only dipping your toes into waters that will turn out to be lucrative and helpful to your company.

This blog will help you on your venture to find the best CFO that you can. Check back often and see what tips and tricks you can pick up.