Home Business Insights & Advice What is an outsourced CFO?

What is an outsourced CFO?

by John Saunders
30th Jun 22 2:52 pm

Is your company in need of a financial expert who can help you outline a budget, forecast finances, analyse expense data, and so much more? Consider hiring an outsourced CFO (chief financial officer) to set your business up for financial success. A CFO can curate financial services specific to your company’s unique needs and goals, being a crucial asset to your ability to scale your business and increase profits. Keep reading to learn more about some of the important services an outsourced CFO can offer and the benefits of hiring one to assist your team!

What does an outsourced CFO do?

An outsourced CFO’s responsibilities go way beyond providing basic bookkeeping and accounting services. To truly know where to steer your business, you’ll need to thoroughly understand how your business is performing financially. A CFO can help you interpret your financial data and make the right decisions based on your company’s goals. Through analysing your company’s costs, margins, inventory, and cash flow, a CFO can help you make decisions that increase profits and scalability. Some of the many services CFOs provide include:

Financial analysis

If you’re the owner of a start-up, you may need professional advice when it comes to analysing your company’s financial weak points. A seasoned CFO will provide diverse insights and solutions to solving all of the company’s financial problems.

A CFO will also capture all the financial data crucial to your company’s success and translate it in a way that is easy for you to understand. All your financial information will be carefully captured and documented in reports, making it easy for you to access and present information to potential investors and lenders.

Financial planning

This includes a thorough analysis of your company’s budget and forecasting. This can help you plan out both your immediate and long-term financial goals. To make sure everything is running according to plan, your CFO will help determine and analyse KPIs that are specific to your company, such as:

  • Profit margins
  • Acquisition costs
  • Market share
  • Cash flow
  • And more.

Raising capital

When an outsourced CFO joins your team, they typically bring with them an entire network of potential investors to whom they can introduce you to. Not to mention, having a CFO on your side builds confidence and reputation, making your company look thorough and professional.  However, that’s not the only perk of hiring a CFO. They can also develop an ideal capital structure specific to your company’s needs – formulating the right combination of debt and equity to help you achieve your company’s goals.

Assisting with mergers and acquisitions

A CFO will help assist your company transfer ownership by handling all necessary financial information during the merger and making sure all necessary documentation and data are accounted for.

Communications

Your CFO will take care of all necessary negotiations between you and your bank – taking the stress off your shoulders. They can also help you present all the necessary financial information to potential investors, renegotiate contracts with vendors, and structure client contracts. You can determine exactly how involved you want your CFO to be, but know that they are on standby for any of your company’s immediate financial needs.

How much does an outsourced CFO cost?

The cost of hiring an outsourced CFO will vary from company to company. Depending on the extent of services you purchase, the overall cost of your package will vary. On average, you can expect to pay anywhere from $1,000 to $12,000 per month depending on the services you’re looking to your CFO to provide. Overall, the price of hiring an outsourced CFO is significantly cheaper than hiring an in-house CFO, which is one of the benefits mentioned below.

The benefits of outsourcing CFO

There is a multitude of reasons why hiring an outsourced CFO is beneficial to your company’s financial success. Having an appointed CFO is crucial, but outsourcing a CFO may be a better decision for your business overall.

More affordable

Outsourcing your CFO is significantly more affordable than hiring an in-house CFO. When hiring internal employees, you have to consider their salary, benefits, training, and necessary equipment when evaluating overall cost. When you outsource a CFO, you only pay for their monthly fee, not having to worry about providing equipment or training. You also won’t have to worry about scheduling vacation or sick days!

Diverse experience

Because outsourced CFOs work with a wide array of different businesses, they come with a diverse set of skills and experience. They may be able to bring more valuable insights and advice to your company, whereas a CFO focused on your specific industry may not be able to bring as many out-of-the-box solutions.

Saves you time

Hiring an in-house employee for any position is expensive both in terms of money and time. Having to spend time onboarding and fully training an employee will take up a lot of time that can be spent working on day-to-day operations and management.

Objective advice

Because an outsourced CFO is separate from your in-house team of employees, they will be able to provide you with unbiased advice and directions. It will be much easier for them to make decisions on necessary cost cuts because they can view your company’s financial situation through an objective lens.

Safer security systems

Investing in safe security systems to protect your company’s important records and information is an expensive endeavor. An outsourced company invests its own money and resources into providing the best security solutions for its clients, so you don’t need to worry about break-ins and hacks.

Conclusion

An outsourced CFO can deliver unbiased, experienced, and affordable financial services to your company. Dial your business in with individually curated financial analysis, planning, reporting, and strategy from an experienced, thorough CFO. Scale your business and raise profits like never before, knowing you have a seasoned financial expert on your side, who will guide you through all difficult financial situations. Consider outsourcing your CFO today.

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