Cash Flow & Treasury Management
Frequently Asked Questions
A fractional CFO enhances cash flow management by creating detailed cash flow forecasts, identifying cash inflows and outflows, and optimizing payment timing. They analyze revenue and expense patterns to avoid cash shortages, recommend strategies like negotiating better vendor terms, accelerating receivables, and implementing tools for real-time cash monitoring. A rolling 13-week cash flow model can help preserve liquidity during seasonal revenue dips or large one-time expenses.
Working capital management involves overseeing current assets (e.g., cash, accounts receivable, inventory) and current liabilities (e.g., accounts payable, payroll, short-term debt) to promote efficient operations. A fractional CFO optimizes working capital by analyzing ratios like the current ratio or days sales outstanding (DSO), streamlining inventory turnover, and negotiating favorable payment terms with suppliers.
A fractional CFO optimizes treasury management by overseeing cash flow, liquidity, and financial risk to help ensure operational efficiency. They implement strategies like cash flow forecasting, optimizing bank accounts, and managing debt or investments. For example, they might consolidate accounts to reduce fees or use sweep accounts to maximize returns on idle cash. By aligning treasury functions with business goals, they ensure sufficient liquidity, minimize financial risks, and support strategic initiatives.