Inside The Role of The Winery CFO: What Do They Do?

We recently took a closer look at the role of a winery controller, someone who manages the day-to-day financial details. 

Now, let’s shift our focus to another key player in your winery’s success: the CFO.

While a controller ensures your books are accurate and compliant, a CFO takes on a broader, more strategic role; they focus on ‘big picture’ financial planning, managing cash flow, and guiding the overall financial direction of your winery.

In a business where the seasons can dramatically affect your bottom line and where producing wine requires significant investment, having a CFO is probably more important than you might think.

Let’s look at what a winery CFO could bring to your business.

What is an Outsourced Winery CFO?

A CFO (Chief Financial Officer) plays a crucial role in any business, including wineries. They handle everything from strategic financial planning and managing cash flow to controlling costs and ensuring accurate financial reporting.

However, most wineries don’t need a full-time CFO, which is where the “outsourced” part comes in. By outsourcing, you get high-level financial guidance without the long-term costs of hiring a senior employee—no full-time salaries, benefits, or overhead expenses. 

Plus, you avoid the need to offer bonuses or profit-sharing arrangements that might be required to attract top talent.

It’s a flexible and cost-effective way to make sure your winery’s finances are on track.

Here are a few things you can expect to see from an outsourced winery CFO in your business:

Financial Planning and Analysis

An outsourced CFO will closely examine your winery’s finances—looking at your revenues, expenses, and budgets—and provide clear guidance on what the numbers mean for your business.

For example, if you’re thinking about buying new equipment, your CFO won’t just check if you have enough cash. They’ll also consider the costs of maintaining and replacing the equipment over time, helping you make a well-informed decision. It’s their job to ensure that your financial choices make sense in the near-term, as well as support your winery’s long-term success.

Cash Flow Management

Cash flow management particularly challenging for wineries. If wine club sales make up a significant portion of your revenue, you’ll experience bitg high-revenue months and low-revenue months.  On top of that, you'll have big expenses, like grape payments, that often don’t line up with your high-revenue months.

Additionally, if you sell through distributors or direct-to-retail channels, you'll need to juggle tracking a substantial amount of accounts receivable while also managing your accounts payable.

The most complex cash flow challenge arises when you're scaling your winery. In this scenario, you must finance the production of wines that may not be sold for several years.

The role of the winery CFO is to keep a close eye on all of this, identifying potential shortfalls before they become a problem. 

An outsourced CFO plays a crucial role in navigating these challenges. Their job is to closely monitor your cash flow, identifying potential shortfalls before they become issues. This might involve planning your annual production levels and grape contracts, or advising you to secure additional funding before a cash crunch hits. 

On a more short-term level, a part-time CFO can help manage your various cash accounts and lines of credit, ensuring you have sufficient funds in the right accounts to cover payroll while waiting for other payments to come in.

The ultimate goal is to keep your winery financially stable, despite the inherent cash ups and downs in the wine business.

Cost Management

When we talk about cost management in wineries, it’s not just about cutting expenses—it’s about making smart investments that will save you money in the long run.

A winery CFO has the specialized knowledge and experience to spot cost-saving opportunities that might not be immediately obvious to the owners. For example, investing in new technology could streamline your operations, reduce errors, and ultimately lower costs. Your CFO will also help manage your inventory, using automated systems to avoid stockouts, overstocking, and spoilage—all of which can significantly impact your profits.

A CFO is the person to help you analyze your various wine sales channels and see which are the most profitable (DTC  vs sales to distributor, tasting room vs wine club).  A CFO can also help you see which wines in your portfolio are the most profitable.

Financial Decision-Making

A part-time CFO can help you see the story in your numbers.  They can provide clear, regular reports that show the real state of your finances. This means you get timely insights into where you stand financially and where you might need to adjust your strategy.

Lender and Investor Preparation

Whether you need to expand acreage, invest in new equipment, or fund the construction of a new tasting room, a winery CFO typically plays a critical role in loan preparation.

They’ll carefully review your finances to determine if taking on new debt is the right choice. They’ll also handle the paperwork and work to secure the best possible terms—like interest rates, repayment schedules, and other loan conditions. 

In addition to working with lenders, a part-time CFO is invaluable when it’s time to seek out financial investors. They can help you prepare comprehensive financial statements and projections that present your winery as a strong investment opportunity. Your CFO will also guide you through the due diligence process, ensuring that you have all the necessary documentation and data to attract potential investors and negotiate favorable terms.

They will make sure you’re prepared for borrowing, so you can grow your business without unnecessary stress.

Next Steps

Because of the unpredictable nature of farming and the high costs involved in producing wine, wineries typically need a CFO even more so than other businesses. 

A CFO can provide the financial expertise needed to navigate these challenges. Yet in many wineries, the in-house team often juggles multiple roles without dedicated financial leadership.

If you’re thinking about bringing on an outsourced CFO for your winery, it’s important to choose someone who understands the nuances of the wine industry.

At Northwest Wine Accounting, we focus on creating a solid financial plan for your winery and providing ongoing support in your business journey.

If you’re ready to explore how a CFO can support your winery’s growth, feel free to reach out. We’re here to help.