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What is the role of a CFO in a start-up ?

The CFO in a start-up is finding an increasingly important role. With globalization, companies aspire to grow beyond their local, regional and national borders. And in doing so, they sometimes have to outdo themselves in reading market opportunities and management. This is where the CFO has a crucial role to play as a business alert that goes beyond simply reading numbers and other statistics. In the context below, let’s analyze the role of a CFO in a start-up.

Advimotion is a financial consulting firm that assists startups and SMEs in obtaining non-dilutive financing and equity fundraising. We also act as advisors in business sales transactions to best represent the interests of sellers.

We offer strategic consulting and outsourced CFO services to ensure the financial and operational monitoring of your business. Finally, we take care of the drafting of investor documentation : business plan, pitch deck, creation of reporting files and valuation calculations.

For more information, please contact us.

When is it worth hiring a CFO ?

Ask yourself the following questions when considering whether it’s time to hire a CFO :

Is there someone who oversees the finance team ?

Your finance team plays a critical role in your business. But, even the smartest, most independent teams still need supervision. If there is no one in place to provide that oversight, you may want to invest in a CFO. This person will ensure that your team is operating at peak performance.

Are you looking to expand your business into markets outside the country ?

Is your startup’s product or service capable of thriving in markets outside of France ? If so, it may be in your best interest to expand and fill these potentially lucrative niches. If you don’t have a CFO, you may find yourself lost in the details of new operating procedures, pricing, shipping costs, regulations in different countries, etc. A CFO will take on all of these responsibilities and ensure that your company’s expansion is in line with your long-term investment plan.

Having trouble raising capital ? The intervention of the CFO start up.

Raising capital is one of the key elements of a startup’s success. If you’re looking for new capital and can’t find it, a CFO will be helpful in getting you through that extra step.
CFOs are at the heart of the data flow and they also need to understand the reporting requirements for banks and investors. This visibility – along with the CFO – will help you make a clear case to potential investors (you have the vision ; they understand the language).

The role of a CFO in a start-up

Basic financial accounting and record keeping in a very orderly fashion are essential. A CFO must implement systems, processes and controls at every level of revenue and expense. It is very important to identify the right skills in the in-house finance team or to manage this department through an outsourcing agency, in order to keep an eye on the appropriate financial accounting framework.

It is also essential to identify the right IT-based finance platform to support the score management function, keeping in mind the growing needs of the business in optimizing data mining.

In addition, a CFO must play an important role in processing transactions with large customers and ensuring that this is structured upfront to mitigate cash-flow risk or create business requirements at a later date. He/she will need to conduct this by applying financial and business judgment based on sound business practices to skillfully manage customer expectations. Also, written business agreements must be properly reviewed by a CFO to guard against any risk under the agreed upon terms in the event of a business failure.

The CFO must address the many attentions of business leaders, which include: Managing external growth projects, adapting financial and social arrangements to their company, anticipating business developments with a long-term vision of its continued profitability, ensuring the profitability of the business or promoting good relations with banks and other financial institutions and obtaining a reinforcement of knowledge in legislation and regulations.

Thus, the objective of an Administrative and Financial Director within a startup is to help the company improve its business strategy, economically, socially and financially in a secure framework by measuring the impacts of possible risks.

The responsibilities of this position revolve around financial and human resources management, technology and administration.

Financial management, how the CFO start up intervenes

Several tasks will be required:

  • Accurately analyze and present financial reports, clearly communicate monthly and annual financial statements, assemble all financial reporting documents, and handle all financial, project/program and grant accounting.
  • Coordinate and lead the annual audit process, liaise with the external auditors and the Board Finance Committee; anticipate changes as needed.
  • Oversee and direct the annual budgeting and planning process by working directly with the Executive Director; manage and review all financial plans and budgets; monitor progress and changes; and keep the executive team informed of the financial status of the organization.
  • Manage the organization’s cash-flow and forecasting.
  • Implement a robust contract management and financial management/reporting system ; ensure contract billing and collection schedules are met and that finances and cash-flow are stable to meet operational requirements.
  • Update and implement all necessary business policies and accounting practices ; improve the overall policy and procedures manual of the finance department.
  • Effective presentation of critical financial issues to the Board of Directors with good communication.

Human Resources, Technology and Administration

Major tasks to be performed will be :

  • Further develop the company’s human resources and administration, improving professional development, compensation and benefits, performance evaluation, training and recruitment.
  • Ensure consistent and streamlined recruitment processes.
  • Establish and manage a comprehensive training program to educate employees on personnel tools, policies and procedures.
  • Work closely and seamlessly with all external partners, including third party vendors and consultants.
  • Oversee administrative functions as well as facilities to ensure efficient and consistent operations as the organization evolves.

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