Outsourced CFO Services – What it is and its benefits

outsourced CFO Service

It’s a fact that no matter how much experience you have to be on the sea, without any experienced navigator, it’s likely for the ship to not make it out of the harbor. Similar is the case with the business world where you will need the guidance of an experienced financial advisor to stay ahead of the competitor and ensure better financial planning. Having the support of a CFO is the right way to sail safely through the financial waters and grow and succeed.

Since it is not possible for small businesses to hire a full-time chief financial officer (CFO), outsourced CFO services can help them get access to the financial guidance they need at a fraction of the cost. Wondering what it is and how it can be helpful for your small business? Keep reading to know more.

What Are Outsourced CFO Services?

An outsourced CFO can be an individual or a team of financial advisors, dedicated to helping businesses in several ways, such as providing strategic financial advice, monitoring key metrics, managing cash flow, etc. The goal is to help clients to be on the right path with the appropriate financial planning. Outsourced CFO services are dedicated to helping small businesses and startups with expert financial guidance that they otherwise would be unable to manage solo.

The services can be similar to what a full-time CFO can offer but on a part-time basis or dedicated resource basis. The type of hiring model can be selected upon your specific budget and financial support needs. An experienced and qualified CFO will serve as your guide to help your business understand its current financial situation as well as make the plans such as tax consulting to ensure future success.

Outsourced CFO Services Include

An outsourced CFO can help businesses with a wide range of financial services, which are aimed to help businesses make an informed decisions as well as stay alert about the potential problems that might arise in the future.‍ Some services offered by an outsourced CFO service provider may include:

Financial Planning and Budgeting – For a business, aiming to grow higher in the future, it is very important to have a good financial plan ready to better understand their current financial position as well as develop feasible plans for future growth. This is also very important and useful when you plan to attract investors to invest in your venture. They aim to help create a business budget and develop realistic projections for the future.

Financial Analysis And Reporting – For better financial planning, strategic data and analysis can be helpful to understand the performance of business and industry. The statistics can be used to make better decisions based on comprehensive financial reports. A professional in the field can help with the appropriate data to take a look into your financial future by analyzing past performance as well as current data and then making future decisions.

Cash Flow Management – For a business to ensure financial freedom as well as longevity, it is important to manage cash flow. With the help of an experienced professional in the field, one can ensure cash flow management by monitoring financial transactions, ensuring on-time payments, and more.

Risk Management – When you are running a business, it is important to keep every aspect in mind. Remember that you cannot just expect to keep growing, it is also very important to take care of the risks involved. After all, it is possible to handle the risks when you are prepared for them. There can be various kinds of risks that might come your way, such as market volatility, unfavorable economic conditions, etc. When you are busy with business growth plans, a professional in the field can help identify and mitigate potential business risks by crafting projections and analyzing trends.

Strategic Financial Planning And Advice – For a small business or startup, a clear vision about the direction of business growth is very important to ensure long-term success. Thanks to the support of an outsourced CFO, it becomes possible to have a fully-functional financial plan that has been developed with the growth of the business in mind to provide advice on scaling a business.

Benefits Of Outsourcing CFO Services

Unlike hiring tax consultants that are only limited to offering financial support related to taxation, an Outsourced CFO can offer a host of services, making it a great decision for a business. But a wide range of services is not just enough to make the decision, here are some more reasons to hire a full-time CFO.

Cost Savings – When you are running a small business, which is already on a tight budget, it’s not feasible to hire a full-time in-house financial expert as this can cost hundreds of thousands of dollars in salary and benefits. Outsourcing services to a third-party agency can help make things possible for as low as a few thousand dollars per month, depending on the scope of services.

Access To Expertise And Resources – When you choose to outsource services to a third-party CFO, you do not just get the best financial support, but they are also experts in working with various tax and financial software such as Xero bookkeeping as many of them are also Xero partners so you can get the best in your budget. Additionally, you will have access to a team of experts, having premium versions of software and tools to help your startup succeed.

Flexibility and Scalability – Unlike hiring an in-house team of financial advisors, outsourcing is much more flexible and can be scaled up or down, depending upon your monthly budget or the tax or financial services you need. The services of an outsourced CFO come without any long-term commitment, making it a flexible choice. So, when your business is growing, you can choose to add more services like tax consulting based on your financial needs.

Better Financial Management – One of the best parts about hiring the services of an outsourced CFO is that you will have access to better financial advisory, resulting in identifying and mitigating potential business risks by analyzing trends that offer deeper insight. With a detailed analysis, it is possible to make better financial management decisions with business growth in mind.

Final Words

With all the above-mentioned information, it is wise to say that an outsourced CFO can be a great support for business management as well as mitigating risk with a detailed analysis of financial trends and data. When you are not a specialist in the financial planning field and have no budget to hire a full-time expert in your team, your business should consider outsourcing CFO services to make the most of your growth plans with the appropriate financial support. A professional in the field can offer access to pivotal data and insights without investing in hiring a full-time CFO. The goal of outsourced CFO Service providers is to help your startup manage its finances and make more informed decisions. When making a decision, it is suggested to go through the experience and track record of the service provider to be on the right track of business growth.