Is It Time To Consider an Outsourced CFO?

The following article was first published on the Insights section of Whittlesey’s website. It is reposted here with permission. 

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As a business owner, it’s essential to have a strong understanding of the financials behind your company.

However, having your CPA license or a full-time chief financial officer on staff is not the only way to stay on top of your financials.

Outsourcing your CFO can be a highly effective option that comes with a variety of benefits.

What Does an Outsourced CFO Do? 

An outsourced CFO is a professional who offers various financial services part-time to meet a company’s financial requirements.

They act as a strategic advisor to the management team and can execute a full-time CFO’s responsibilities at a lower cost.

They specialize in financial strategy, infrastructure development, team management, and special projects.

They may also assist in recruiting and training finance staff, managing relationships with external financial partners, and providing recommendations and insights through analyzing financial data.

Cost-Effective

If you’re looking to cut costs without compromising quality, using an outsourced CFO may be the solution for you.

Instead of paying for a full-time salary, benefits, and office space, you can only pay for the services you need, making it a cost-effective solution.

This solution allows small business owners to receive the same high-level accounting standards without the high price tag. 

Wealth of Experience

When you outsource a CFO, you can work with people with a broad range of knowledge and experience.

They typically have backgrounds that span far and wide and have experience working with various industries.

They can provide a fresh, valuable perspective into operations and help to make critical financial decisions.

Their specialized knowledge can help businesses be sure they are in compliance with regulations and are making the best financial decisions. 

Scalability

Outsourcing a CFO allows businesses to scale up or down the services they need, depending on their current stage.

This greater flexibility enables organizations to adapt to ever-changing needs and ensure they always receive the right level of support. 

Independence

An outsourced CFO’s independence is a significant advantage for any business. It offers a new and unbiased perspective that can help prevent conflicts of interest.

The CFO can act objectively without personal or internal bias, only making decisions based on the business’s best interests. 

When Is the Right Time to Outsource Your CFO?

When running a business, certain financial milestones may indicate it’s time to hire an outsourced CFO.

These may include:

• Difficulty making confident financial decisions
• A need to raise capital to support growth
• An abundance of data that requires analysis and insights
• Cash flow concerns and uncertainty on how to address them
• An overwhelming number of questions from your accounting team
• A need for executive-level financial reports to present to your board

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About the author: John Trusler is a tax director in Whittlesey’s Hartford office. For more about outsourcing your CFO function visit Whittlesey’s website.