This cost-effective option can help provide financial peace of mind.
Many business owners have one common goal — to succeed. While many factors go into succeeding, a commonality everyone can agree on is having a strong management foundation with experts in key areas. Perhaps one of the biggest and most important of those areas is the Chief Financial Officer (CFO). The CFO may offer oversight, protection, improvement, projections, and ultimately help you understand your bottom line and take your business to the next level.
In larger companies, the CFO is a full-time, upper level management position. This also generally comes at a high cost. To see the true value of a good CFO , larger companies offer substantial salaries to be able to trust good direction and dedication.
Smaller companies, particularly early stage startups, find they may not need someone solely dedicated to finances on a full-time or day-to-day basis. What they do need is help seeing a clearer financial picture and handling important accounting tasks – all while having a more modest budget. This is where hiring an outsourced CFO may be the best option.
In this blog, we’ll be discussing the benefits of an outsourced CFO and provide a list of services you should and shouldn’t expect from an outsourced CFO.
What is an Outsourced CFO?
An outsourced CFO works on a part-time or contracted basis. They may also be referred to as a fractional CFO. They provide your business with the financial expertise needed to develop long-range strategy and financial goals. Outsourced CFOs have a wide range of experience across various entities and can provide a broad perspective for your business model. These services may be obtained through a CPA or CFO firm. If there are not any outsourced CFO services available in your area, you may want to explore virtual CFO services as an option.
Services an Outsourced CFO can Provide
An outsourced CFO is qualified to perform the same job functions that a full-time CFO would provide. Ascension CPA offers a range of services including the ones listed below.
By outsourcing a CFO, they can help direct your business toward long-term growth. This includes developing strategies for monitoring cash flow and cash management, exploring tax savings, budget and financial statement preparation, and profitability and trend analysis. These projections provide financial insight and lay the groundwork for developing your company’s budget and establishing needed staffing levels and planning future expenses.
Planning and Development
Outsourced CFOs can define and quantify long-range plans and goals. They can analyze proposed equipment purchases and business expansion plans. Additionally, they are able to offer assistance with mergers and acquisitions by fulfilling documentation needs, providing needed reports such as forecasting and analysis — and ensuring financial reporting is complete and timely. They can also assist the business owner and management team with input and expert advice.
Training and Management
An outsourced CFO may help train and provide oversight to your accounting staff. They can assist in developing procedure manuals and staff policies for day to day operations. This individual may also help determine needed staffing levels and help develop business salary schedules.
An outsourced CFO can act as a go-between for the small business with bankers, investors, attorneys, insurance agents, etc. They are skilled at negotiations and will bring an additional level of professionalism and financial understanding to the table.
If your business plan includes eventually hiring a full-time CFO, then utilizing a part-time, outsourced CFO will provide much-needed insight and experience.
When the time comes, the outsourced CFO can also develop strategies and plans to lay the groundwork and ease the onboarding of a full-time CFO.
The outsourced CFO will provide a more objective, unbiased opinion on business decisions and cost-cutting measures.
Services not Suitable for an Outsourced CFO
Utilizing an outsourced CFO can bring a new dimension to the financial structure of your business. However, in order to maximize the value of this position, business owners should use care when developing the responsibilities and tasks they plan for the position.
- Routine accounting services – Keep in mind that while an outsourced CFO is capable of performing daily accounting services, these tasks are best left with the current accounting staff. To receive maximum return on investment, an outsourced CFO would be best used for top-tier finance functions, developing strategy and long-range plans. If you find your small business also needs additional accounting services, Ascension CPA offers a wide range of accounting and CFO services. We can provide everything you need to keep your finances in order and under control.
- Raising capital – Developing relationships with potential investors is best left to the owners or founders of a small business. Their passion is what made the business what it is today and they will best be able to sell their dream and vision for the future. In this instance, an outsourced CFO has a critical role of preparing financials and proposed business models and being available to answer questions related to the company’s financial infrastructure.
Why Work with Ascension?
Ascension CPA provides the CFO and full-service accounting services that allow small business owners the time to focus on what they’re passionate about rather than worrying about their financial issues. Working with Ascension CPA isn’t just a business investment but also a Life Investment. Get started working with us for all your financial planning and analysis needs!