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Running a SaaS business on your own comes with a host of financial, accounting and compliance challenges. From predicting future revenues to managing capital, once your small business becomes not-so-small, it can become too much for one person to handle on their own.
That’s where a SaaS CFO comes in — a financial expert with the relevant experience needed to help you make well-informed decisions about your business’ finances, risks, profit, cash flow and future.
Not sure if hiring a SaaS CFO is the right next move for your company?
Here are seven compelling reasons why a full-time or outsourced CFO should be your next hire:
1. A dedicated CFO will help you leverage the right financial models
A significant part of every CFO’s job is to understand how to build and apply financial models related to the business’ particular goals. When you bring in a knowledgeable SaaS CFO, they can provide experience-backed insights into the profitability, cash flow and capital management of your business..
Financial models are designed to give business leaders both granular and big-picture views into the financial health and future of the company. Your SaaS CFO can create customized financial models that directly track the specific goals you have for your company, offering valuable at-a-glance information.
By applying these models to each area of your business, your SaaS CFO can analyze company performance from multiple perspectives and assess the true health of the business in terms of its performance over time.
2. Every aspect of your business, including your finances, deserves quality attention
As a busy business owner, you may not have the time and energy to watch every aspect of your business as closely as you should. But with a SaaS CFO on your team, you can have the peace of mind that comes from knowing attention is being given to every corner of your business — including your financial health.
Your business’ healthy bottom line is critical to your long-term success. SaaS CFOs are experts at making sure your business’ finances are constantly up-to-date, accurate, auditable and compliant with relevant regulations. They will also work with you to identify opportunities for savings or revenue generation, as well as handle the investment strategies that fuel your company’s growth.
If you don’t have the bandwidth to monitor these key details, it’s time to bring in a SaaS CFO, before you make a costly mistake or miss out on a significant opportunity.
As a business leader, you likely already understand the value of a second opinion on major business decisions. What if that opinion came from the person who understands the finances and future of your business better than anyone else?
SaaS CFOs help CEOs better manage their businesses by providing guidance and valuable risk vs. reward or cost vs. benefits analyses on key decisions. They have both the industry-based expertise and financial acumen needed to offer a unique perspective and provide insights that may not be immediately obvious to the CEO.
4. With a SaaS CFO monitoring your industry, you can identify merger and acquisition opportunities sooner
SaaS CFOs can help business owners identify profitable merger and acquisition opportunities with accuracy and speed. Not only do they understand the value of SaaS businesses, and know the direction your company is headed, they also have the tools and training needed to analyze potential opportunities from a financial perspective.
When it comes to completing the deal, your SaaS CFO can provide guidance on structuring the contract, conducting due diligence processes, negotiating terms and managing transactions in order to maximize your business’ profits, saving you time and complications.
5. SaaS CFOs have an eye for risk — and opportunities
A SaaS CFO with deep knowledge of your business’ finances can help you discover potential areas of risk, such as cash flow issues, customer churn, and unnecessary operational costs before they become major issues. They can also provide advice on how to mitigate or manage those risks through financial forecasting and strategic planning.
While markets and industry trends can change quickly, with a SaaS CFO on your team, you can better prepare for these changes and make educated decisions that will put your company ahead of the competition.
6. The best forecasts come from CFOs with industry knowledge
SaaS CFOs have the expertise and specialized industry knowledge needed to forecast future revenue based on data from previous quarters and years, taking into account current trends. By looking at historical performance, SaaS CFOs can predict potential cash flow issues before they happen and work diligently with the CEO to ensure that any risks are addressed well in advance. With these safeguards in place, your business is prepared for any financial surprises that could occur down the line.
7. A specialized CFO improves your company’s financial transparency
If you’re currently preparing your own financial statements, you could be overlooking critical errors or compliance issues. That’s why bringing in a SaaS CFO isn’t just a time-saver, but can also protect your business from regulatory violations.
A SaaS CFO will ensure that your financial statements are presented accurately and transparently for both internal stakeholders and external investors, providing peace-of-mind and total transparency when it comes to money matters.
Whether your SaaS business is a new startup or a mature company, hiring an industry-specific CFO is an important step for sustainable growth. With their expertise in financial models and risk versus reward analysis, plus the extra support and increased transparency they provide CEOs, a SaaS CFO is a valuable addition to your team.
Want more? Escalon has helped over 5,000 companies across multiple industries to optimize their business, with our FinOps services (CFO services, taxes, and accounting and bookkeeping), PeopleOps services (HR, benefits, recruiting and payroll) and Risk services (business insurance). Talk to an expert today.
As a professional copywriter in the finance and B2B space, Grace Townsley offers small business leaders big insights—one precisely chosen word at a time. Let's connect!