A Chief Financial Officer (CFO) serves as the “guidepost” of a company’s financial operations, contributing significantly to its overall success. Beyond the traditional responsibilities of financial management, a seasoned CFO brings a wealth of expertise in various areas that are critical for strategic decision-making. Their role extends beyond the pure number-crunching to often include risk management, cost control, and comprehensive financial planning. This approach enables them to guide a company through market uncertainties, identify growth opportunities, and adjust resources for sustained profitability.
The CFO in a business:
- Keeps a close eye on the numbers and trends,
- Alerts management when preventative actions are required,
- Helps management create sound forecasts and plans,
- Ensures the cash inflows and outflows are managed well so the business never runs out of cash or needs to borrow in haste,
- Reports on revenues achieved compared with targets,
- Gives solid information on a range of Key Performance Indicators (KPIs) to the business decision makers, and also
- Helps management with decision making.
While most associate the role of CFO with large corporations, the value they bring is not exclusive to large entities. Even smaller businesses, (yes, like local dental practices), can benefit greatly from the insights and financial expertise that a seasoned CFO provides. For a dental practice, a CFO can bring financial discipline, budgetary precision, and regulatory compliance skills… and that’s only the beginning. These things are important in streamlining operations, maximizing your profitability, and ensuring long-term viability.
The Big Question…
But I know what you’re asking: “How can I afford to bring on a CFO?”
It’s a great question, and I’ve got a great answer…
You out-source it. You get a part-time, out-sourced CFO until you can afford one full-time.
That’s where STAC Bizness Solutions plays an important role for many of our clients.
Our ‘Controller/CFO Service’ has been developed with input from our dental practice clients to make sure it’s the ideal mix of support services AND affordability.
As your CFO we’ll roll our sleeves up and work with you during strategic meetings throughout the year on:
- Cash flow – Efficient management of cash flow to provide cash for saving or investing in growth
- Profitability – Identifying key drivers of profit and focusing on these
- Business value – Growing a valuable and saleable business asset
- Structure management – Staying on top of risk and taxation issues
As a dental practice owner, it’s critical that you measure and monitor Key Performance Indicators (KPIs). That is, the handful of numbers that really matter in running your practice. It is also important that you have a ‘KPI dashboard’ to display your KPI targets compared with your current KPI performance. This helps tremendously in monitoring and managing your practices’ performance and, ultimately, hitting your targets. However, you don’t need to go it alone!
As your outsourced CFO, we’ll regularly provide you with clear financial reports, easy-to-understand KPI information, as well as our dental industry-specific experience to interpret the information, make suggestions and help guide your decision making.
Items we’ll discuss each meeting include:
- Profit (historical and future)
- Cash flow (historical and future)
- KPIs: A mixture of focusing on Lead Indicators which drive performance and Lag Indicators that measure the outcomes
- Marketing activity and effectiveness
- Operational efficiencies such as work-in-progress or workflow
- Financial indicators such as revenue per patient, collection ratio, patience retention, etc.
- Office staff efficiencies, knowledge management, morale and safety.
So Where Does All This Lead?
As a dental practice owner, partnering with a true financial expert and adhering to sound financial practices is critical for long-term success.
First, meticulous budgeting and expense management ensure efficient resource allocation, maximizing your practice’s profitability.
Secondly, maintaining a robust financial strategy allows for strategic planning and investment in state-of-the-art equipment and technology, enhancing the quality of patient care and staying competitive in the industry.
Next, sound financial practices contribute to building a strong credit profile, facilitating access to favorable financing options for expansion or unforeseen challenges (remember Covid?). Additionally, a well-structured financial plan aids in navigating regulatory compliance, avoiding legal issues that could jeopardize the practice’s reputation.
…and last but not least, it instills confidence among patients, staff, and partners, fostering a positive and stable business environment. Embracing these financial practices not only ensures the financial health of the dental practice but also lays the foundation for sustained growth and excellence in patient service.
Ready to learn more? If so, we invite you to contact us for a no cost and no obligation meeting to discuss how we can work with you as your outsourced CFO. We’ll outline for you what’s included and what costs are involved so you can see how the service can be comfortably included in your budget.
Until next time, be well!
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7 Key Financial Practices That Separate Thriving, Growing Practices From The Rest.
There’s no denying it. Creating a thriving practice is about much more than practicing medicine!
Topping the list of “other” priorities is your practice’s financial management. In this short guide, the experts at STAC Bizness Solutions outline 7 financial best practices that differentiate struggling practices from those which are highly profitable and experiencing healthy levels of growth.