For many small business owners, managing the financial side of things can feel like a full-time job in itself. Between bookkeeping, budgeting, forecasting and compliance tasks, it’s easy for the numbers to swallow up all your time.
What if there was a way to gain expert financial guidance and free up your time – without hiring a full-time CFO? That’s where outsourcing your CFO functions comes in. An outsourced CFO can have a transformative impact on your business operations and long-term success.
In this article, I’ll explain the top 8 ways an outsourced CFO service could benefit your small company. I’ll provide real examples and address common concerns too. By the end, I hope to convince you that outsourcing at least deserves consideration.
Let’s get started!
Access Expert Financial Knowledge
Outsourced CFOs have extensive experience from senior roles at large companies. Their training makes complex accounting, budgeting, forecasting and taxes much simpler to understand.
This specialized knowledge helps navigate niche problems more efficiently. Outsourced CFOs also share best practices from several clients instead of reinventing solutions individually.
Reduce Business Costs
Rather than six-figure salaries for an internal CFO, outsourced services offer flexible hourly or project-based pricing. Pay only for required support hours each month vs. unused full-time resources.
Outsourcing also eliminates burdens like paid time off, bonuses, benefits and office space expenses that drive up in-house staffing costs significantly. Better control fixed budgets.
Free Up Time for Growth
Delegate routine accounting tasks to an outsourced CFO like bookkeeping, payables, payroll and financial reporting. Reclaim hundreds of hours each year for strategic operations, sales, marketing and new initiatives.
Freed time fuels activities building the actual business vs. non-core number-crunching chores. Pursue opportunities unavailable when remaining bogged down in backend administration.
Access Advanced Analytics
Experienced CFOs utilize powerful forecasting and reporting tools to analyze financials from new angles. Discover trends, risks and optimization possibilities invisible to internal staff distracted by day-to-day tasks.
Uncover waste, inefficiencies and cost-saving tactics. Create long-term financial projections guiding smart resource allocation for maximum growth.
Improve Cash Flow Management
Tight cash flow can sink startups and small firms. Outsourced CFOs excel at optimizing cash collection, payment terms and inventory levels. Reduce days receivable and lower surplus inventory tying up money unproductively.
Enhanced cash flow management funds technology, marketing, hiring or product development without loans or dilution. Sound financing ensures sustainability.
Strengthen Budgeting Practices
Proper budget creation and oversight is critical yet difficult with limited resources. Outsourced CFOs install processes accurately forecasting periods ahead using revenue and cost projections. Benchmark against real data to refine continuously.
Strict budgets avoid unpleasant surprises maintaining control and stability. Meet financial benchmarks boosting credibility for funding rounds if expansion planned.
Simplify Compliance
Compliance consumes valuable time yet errors risk penalties and audits. Outsourced CFOs efficiently complete necessary documents, maintain records appropriately and advise staying code-compliant.
Ensure taxes filed accurately and on-time. Proactively address any compliance concerns discovered before becoming serious problems threatening operations. Outsourced experts uplevel compliance assurance.
Enhance Credibility for Growth
Well-structured financials communicate fiscal responsibility and management expertise encouraging investment. Outsourced CFOs help establish credibility if seeking loans or additional capital infusion down the road.
Their involvement upgrades small business perceptions as a serious organization governed by strategic business principles, not just “winging it” administratively.
By outsourcing CFO functions, businesses gain elite, specialized guidance unlocking strategic advantages across operations. Outsourcing should feature prominently in any small company’s growth considerations.
Conclusion
In conclusion, outsourcing your CFO functions can significantly impact your small business through several key advantages. It provides access to expert-level financial guidance normally out of reach. This helps optimize operations in ways insiders may miss.
Outsourcing also lowers costs through flexible hourly support versus an in-house salary. Perhaps most valuable is the enormous time savings gained to focus on growth. No longer bogged down in back-office tasks, outsourcing frees hundreds of hours annually.
The elevated credibility of well-structured financials also benefits possible funding efforts down the road. Overall, outsourced expertise fills critical skills gaps that stretch resources thin. It positions your organization for stronger growth by lightening administrative burdens draining focus.
FAQS
Pricing varies depending on services required. Expect to pay between $100-300 per hour, with volume discounts for regular monthly support contracts.
Outsourced CFO firms have strict security policies with encrypted servers and devices. Additionally, non-disclosure agreements protect client confidentiality.
Flexible support levels allow scaling services up or down as your business grows and requirements evolve each month. Outsourced arrangements are easy to modify.
