Small business owners and entrepreneurs are often required to wear ‘all of the hats,’ specifically when you’re starting and growing a business from the ground up. But, once your business is more developed and you’re in a more stable place, financially, it’s time to start thinking about ways to improve your systems and optimize your backend – and, sometimes, what you need is an outsourced CFO.
What is an outsourced CFO? What does an outsourced CFO do? An outsourced CFO is a finance leader who is outside of your company. We can provide upper-level finance, accounting, business, and operational guidance and insight into your business.
But, outsourcing a CFO doesn’t mean you’re letting go of control in your business. Many CFOs provide the same transparency and maintained control that you would have with a traditional C-level executive – just without the added payroll costs.
Saying that an outsourced CFO handles ‘upper-level management’ sounds great, but what does that include? What kind of benefits can you expect from hiring a CFO? Why would you hire one in the first place? Let’s talk about it.
In most cases, an outsourced CFO will provide a few important functions that can be broken down into three main categories:
Day-to-day tasks for an outsourced CFO can include streamlining accounting processes, implementing new reporting procedures, developing a cashflow forecasting model, ensuring proper keeping of payroll records and compliance with local, state, and federal tax requirements, creating a budget, etc.
All of these roles are equally important, even for small companies. Rather than doing it yourself, outsourcing a CFO allows you to have a dedicated professional handling these important tasks and systems while you’re able to focus on perfecting your craft and providing amazing client experiences.
Like any investment and hand-off of tasks within your business, you have to measure the benefits along with the cost. While an outsourced CFO varies depending on the size of your business and needs, the ways we can help stay the same whether you’re a $3M or a $10M company.
To keep it clear and concise, here are the top ways outsourcing a CFO can make a positive impact on your business:
As we have a tendency to wear too many hats, outsourcing a CFO can take the stress of financial management off your shoulders – and your team’s. As start-ups and small businesses, we have the ability to grow quickly and sometimes our teams are left in systems that are unprepared to handle our growth. An outsourced CFO can help with both!
Unlike an in-house CFO, an outsourced or virtual CFO can be hired full-time, part-time, or per project as needed. You don’t have to keep them on payroll 24/7 to experience the benefits.
Never overlook the power of having financial insight in your business and in your industry. Regular financial forecasting and insight can help you be strategic and successful in your investments and prevent periods of low or no cash flow.
In businesses that can become a little tricky when tracking and reporting financial information, an outsourced CFO can be a huge lifesaver. Based on your industry, you can work with a CFO who knows exactly what you need to stay on top of legal fees and reports – particularly for start-ups and non-profits.
If you’ve ever wanted to mitigate risk in your business, calculating upcoming and potential risks is step #1.
Outside of normal business forecasting and reporting, an outsourced CFO can help you craft both a 3-year and 5-year forecast and strategic plan for expansion and growth.
The tasks handled by an outsourced CFO are nothing to laugh at, with the time that a dedicated professional spends getting the best results possible an untrained or learning employee or business owner can struggle to complete – meaning you’re losing so much time due to these tasks.