Guest Articles

The challenge often comes when the business starts to grow.

In the early stages, the owner is usually involved in almost everything, from sales and operations to banking, hiring and major decisions. That may work for some time, but as the business becomes larger, it becomes harder for one person to manage everything effectively.

At that stage, the business needs a clearer understanding of its numbers.

Owners need to know where the business is making money, where cash is being tied up, which customers or products are performing well and how much funding may be required for future growth.

This is where a CFO can make a real difference.

A CFO should not only look after budgets, accounts or audits. The role should be much broader. A good CFO works closely with the owner, understands the business and helps management make better financial and commercial decisions.

Cash flow is one of the most important areas.

A business may be profitable on paper but still have cash problems because money is tied up in receivables, inventory or expansion. Good cash flow planning helps management see problems before they become serious.

The same applies when a business is thinking about entering a new market, hiring more people, opening a new facility or making an acquisition. These decisions may make sense commercially, but management also needs to understand the cost, return, risk and impact on cash flow.

As a business grows, financial controls and responsibilities also become more important. The objective is not to create unnecessary bureaucracy. It is simply to make sure the company can grow without losing control.

A CFO can also provide an independent view. Business owners naturally believe strongly in their companies, but sometimes an important decision needs someone to challenge assumptions, look at different scenarios and highlight risks.

For many SMEs, this does not mean hiring a full-time CFO.

A fractional CFO can provide experienced financial leadership without the cost of a permanent senior executive. The CFO can also work with the existing finance team, improve processes and help strengthen the business as it grows.

The best results usually come when the owner and CFO work well together.

The owner brings the vision, market knowledge and relationships. The CFO brings financial discipline, analysis and an independent perspective. Together, they can help the business grow in a more controlled and sustainable way.

Author: Adnan Haroon, Founding Regional Director, The CFO Centre Middle East

Adnan Haroon joined the British Chamber of Commerce Dubai's podcast, Don't Do That, Do This!, to share his insights on the topic. To learn more and hear the full discussion, listen to the episode here.