How to Obtaining the Funds Needed to Keep the Company Alive and Thriving for the Next Two - Essay Example

The paper "How to Obtaining the Funds Needed to Keep the Company Alive and Thriving for the Next Two" is an outstanding example of an essay on finance and accounting. The situation faced by the CFO demand that new ways of generating or saving on some money must be devised for the company to keep running for the next two years. Therefore, the first proposal for obtaining funding to keep the company thriving is to track down all company spending areas, and cutting on costs, to remain with necessary spending only (Ochtel, 2009). This may include looking at the high expenditure areas for the company such as labor, and cutting on unnecessary labor if the company can manage to work with fewer employees. The alternative can be the adoption of a cheaper technology alternative that will allow the tasks in the company to be performed by a few employees. The option of outsourcing at the expense of maintaining the existing workforce can be considered since outsourcing is a cost-saving alternative to hiring employees for a company (Brealey, Myers & Marcus, 2012). This will save on the labor costs of the company, and allow the company to save some money to spend in the course of the two years. In a nutshell, the CFO must ascertain that any expenses that the business incur are very justified and necessary (Ochtel, 2009). This will help in saving on costs, and thus preserve some money for essential expenditures during the two year period.

The creation of a low-marketing budget is yet another way of saving on some money for funding the company for the two year period (Brealey, Myers & Marcus, 2012). The fact that the company has to wait for a two-year period before the new product can finally sell to the public simply means that there is ample time to develop a variety of low-cost marketing strategies, which will then save on the marketing expenditure of the company. This will go a long way in saving some money that can be used to extend the coverage of the company budget during the two year period. 

Borrowing from the Company’s retirement/pension account is another creative way through which the CFO can manage to keep the company thriving for the next two years. Borrowing from a company’s own retirement account is a cheaper method of obtaining funding for a business, while at the same time being convenient due to little time and bureaucracy requirements (Ochtel, 2009). Therefore, the company can borrow from its retirement/pension accounts and use the money to run its budget for the two year period, then payback after the new product starts bringing in money.

Factoring also stands as an option that the CFO of the company can adapt in order to finance the company for the next two years. Factoring refers to the selling of the debt receivables of a company to another agency that is willing to take the trouble of collecting the debts for some financial gains (Brealey, Myers & Marcus, 2012). Despite the fact that factoring would mean selling the debt receivables at a relatively lower value than they are actually worth, this option can generate money for the company at the time required, while also saving the company on any further debt collection expenses (Ochtel, 2009).