How An Outsourced CFO Can Transform Your Business

Outsourced CFOs are financial specialists outside your team who provide expert accounting, strategic planning, and guidance to help your business run smoothly. Outsourced CFOs perform the checks and balances for a company and support it with its overall financial reporting and management.

Depending on the size of your company and how complex its finances are, you may be able to outsource your CFO duties to a small accounting team or an entire department.

Nine benefits of outsourced CFO services

From startups to established corporations, here are some reasons your business may want to consider outsourcing your CFO duties.

A cost-effective choice

Outsourced CFO services are a cost-effective alternative to hiring an in-house CFO. In-house CFO teams can require significant time and funding to hire, train, and oversee. Outsourcing may make more sense if you are starting a business or your company is relatively small. 

Your business can start with a flexible arrangement to work with an outsourced CFO team or department. You can get advice and financial guidance as you need it. As your business grows, you can opt to hire a full-time CFO if the service is no longer needed.

Give yourself a running start

Starting a business is exciting. Nonetheless, this excitement often leads to rushed decisions and sloppy accounting practices. If you choose to outsource, you can hire someone who knows your business and its situation and will give it the proper attention it needs before running head-first into any problems.

Your CFO service provider can set monthly and quarterly goals and projections for your business. Targets will help you budget for the future and lay a solid foundation for your company.

Streamline your accounting processes

A sound and efficient accounting process is essential for a company of any size. Outsourced CFO services can help you streamline your accounting processes by regularly monitoring your business’ books. They can help you identify and correct inefficiencies in your accounting process to easily track your finances.

Outsourced CFOs also access up-to-date accounting practices that make managing your business’ finances easier. They have experience with the latest financial software programs, like QuickBooks and Xero, that help your accounting department run more efficiently.

Improve your company’s financial reporting

Creating financial reports is time-consuming and often overwhelming for any business owner, regardless of the size of their company. Outsourced CFO services can help you compile your financial reports promptly and spot issues in your accounting. 

CFOs can help you deliver accurate and timely business results to your stakeholders. They review and revise your financial reports to ensure they meet all legal and regulatory requirements, such as the Sarbanes-Oxley Act, which helps instill confidence in your investors.

Develop financial procedures and policies

A solid financial plan is one of the cornerstones of any business’s success, and an outsourced CFO can help you develop this plan for your company. Outsourced CFOs have experience managing company finances and can advise you on budgeting and forecasting. 

CFOs can also help you identify your company’s financial requirements, objectives, and goals and then develop minimum standards for all financial processes. This approach will help you increase transparency and accountability in your business’ finances, giving you more control over your company’s future.

Improve your payroll process

A consistent paycheck is hard to come by in the fast-paced business world, especially if you have employees to pay at different times throughout the month. Outsourced CFO services can help you organize your payroll and payroll tax laws to ensure all employees receive their pay on time and without confusion. 

Outsourced CFO services can also work with you when balancing employee benefits programs, such as health insurance and retirement packages. Most companies have a combination of policies with different benefits for different categories of employees. Outsourced CFOs can work closely with you to ensure all benefits package elements are in place.

Provide insights

Data are vital for any business, especially for startups. Outsourced CFOs can help you develop your business financial models to help you make intelligent decisions about your company’s growth. 

CFO services provide critical insights into what type of growth is realistic and sustainable. They analyze your data and help you assess financial KPIs, including:

• working capital
• Debt-to-Equity ratio
• gross profit margin
• Return on Equity
• operating cash flow

Your CFO services can also offer recommendations for improving a specific financial KPI. This info will help you focus on areas of your business most likely to add value and ensure the best possible outcome.

Manage new business opportunities

One of the most critical factors in determining the future of any business is how the company communicates its value and potential. Outsourced CFO services can help your business plan its financial activities when expanding into a new market or introducing new products and services. 

A good CFO can help you secure financing for your company and ensure you get the best deal possible. Their services can help you create an investor package highlighting your strengths and what you can offer investors. They can also assist when recruiting new investment partners, such as venture capitalists and angel investors.

This service is not just for companies with big budgets who have expanded into other businesses but also for small- and medium-sized businesses looking to expand their operations.

Focus on your strengths

Outsourced CFOs allow you to focus on your core business while they take care of the financial side of things. They can help you turn your business’ attention to other, more strategic areas that make it a competitive company.

You will gain more control over your business and its financial plans, allowing you to spend more time on growing your business and improving its profitability.

Final thoughts

Outsourced CFO services can help you develop a sound financial plan and calculate your stakeholders’ accurate and timely financial results. As a business owner, outsourcing your CFO services can give you the boost the business needs to grow and succeed.