Do I need Project-Based CFO consulting services?

Business owners or managers may be asking whether they need project-based CFO consulting services. North Star CFO can help answer this question.

North Star CFO provides consulting services for your business when you have finance-related questions, are being asked questions that you cannot readily answer, or need help to meet deadlines.

Financial-related questions are being asked and need to be addressed.

  • Having an entrepreneurial mindset and a business with growth potential is truly exciting. When you first start your business, you might not see the need for someone with a strong financial background.  
  • You may believe that your good product or service, dedicated employees, and a reliable bookkeeper or accountant—who manages accounts receivable and accounts payable and ensures employees are paid on time—are sufficient. As the business begins to grow, you might feel confident that your company has the capacity for expansion and that your employees can work overtime if necessary.
  • However, as your company transitions from small to medium or large, you may encounter increasing requests for financial information that you are unable to provide. These requests can come from suppliers, lenders, and company advisors, including your board of directors.

Questions from suppliers may require higher-level financial information

  • Because your business is growing, you contact your suppliers to increase your credit limit. 
  • Depending on the limit requested, a supplier will start to request financial statements based on Generally Accepted Accounting Principles (“GAAP”), or they will need to see proof of a line of credit with a lending institution.

Questions from lenders may require higher-level financial information

  • Because your business is growing, you need to purchase additional equipment or hire more employees. 
  • You want to make sure you have the best financial option available, so you contact your lender.  You may now be at the level of borrowing with your lender in which your company’s financial ratios need to fall within certain parameters established by the lender.
  • The lender will request financial statements based on Generally Accepted Accounting Principles (“GAAP”). 
  • They may request a budget or forecast for the next twelve months.
  • The lender will use the GAAP prepared financial statements including Balance Sheet, Income Statement and Cash Flow Statement to calculate various financial ratios.  Based on these ratios, which reflects the reality of your company, they will ask questions and then determine whether to loan money to your company and what risk premium they will add to the lending interest rate. 

Do you need help or have any questions?

Contact me at North Star CFO if you need help or have any questions.