Part-Time CFO: what is it?
A part-time Chief Financial Officer (CFO) is a finance professional who works part-time in multiple companies on specific missions. This CFO holds the same responsibilities as an internal CFO and oversees the company's activities from various perspectives depending on the needs, such as cash flow tracking and projection, financial analysis to aid in financial decisions, taxation, and implementing financial dashboards.
Your role and contributions at Allocab
At Allocab, my role is to support the management team through their current phase of rapid growth and the financial structuring it demands. This involves particularly addressing the challenges of predictability and securing Working Capital Requirement (WCR).
Challenges in accessing short-term financing
Allocab has a recurrent and significant need for WCR, specific to our sector. Our drivers are paid much earlier than we collect payments from our B2B clients, who have standard payment terms. We sought a solution that could meet this financing need, but more importantly, one that is flexible and sustainable long-term, as our WCR need is structural.
How Defacto supports you and its benefits as a CFO
Defacto perfectly meets our needs through its functioning. The company has a maximum line of credit used for payment campaigns, regenerated during customer collections. Furthermore, this credit line automatically evolves with our usage and growth, already increasing by 30% since our launch. This flexibility is a significant advantage over traditional bank lines, where ratios unrelated to our cash flow increase can be restrictive.
Other financing solutions in use
We also use factoring, but it had limitations, especially in financing our drivers:
- Firstly, it didn't address our issue of spending on our service providers well before invoicing our clients.
- Secondly, it doesn't cover all clients but often only the larger ones, and the service isn't always suitable, especially for clients with complex approval processes leading to delays in validation by the factor.
- Additionally, factoring doesn't finance 100% of the assigned flows.
Key advantages of using Defacto's short-term financing
I see three major benefits:
- 1 - Ultra-flexibility of the product:
The credit line evolves to match business growth; there are no commitments or minimum financing requirements. This gives us freedom in usage.
Day-to-day pricing allows us to control our costs, repaying freely. It encourages responsible financing management.
- 2 - Speed of execution and implementation:
The launch was smooth, and since then, the Defacto team has been extremely responsive and attentive to our queries and feedback.
- 3 - Scoring method using existing internal tools:
It's innovative and fast, enabling alternative financing for many SMEs for whom traditional ratios might be unaligned with the company's actual situation.
Thank you, Hugues, for your feedback and trust!