Latest Facts and News
- The global CFO outsourcing market is projected to reach $9.2 billion by 2027, growing at a CAGR of 7.8% from 2020 to 2027.
- Remote work trends have increased the demand for outsourced CFO services by 25% in the past year.
- 78% of small businesses report improved financial performance after engaging in outsourced CFO services.
Companies hire outside agencies for different functions-from accounting to payroll, IT, marketing, and customer service. This is to create efficiencies and save time and resources. With very busy schedules and many things to manage, business owners require as much advantage as they can get. However many business owners forget that it is also possible to hire someone to manage their financial strategy.
Not that in such instances does hiring an outsourced CFO become optional. It is a necessity if you are going for growth, struggling, or trying to sustain success in the business.
This blog post introduces outsourced CFOs, their roles, and their benefits in the simplest of manners so that you can see these persons as important to your business as any other essential part.
Definition of an Outsourced CFO
To make you understand what is an outsourced CFO, let me give you in easy words, an outsourced CFO is a financial expert who will help organizations manage finance while not necessarily being an employee working under full-time duty. To be exact, a part-time CFO provides a high-level financial strategy and management services on a contractual basis.
Now, you will get all the benefits of having a Chief Financial Officer without any full-time commitment or cost.
Also Read About → Fractional CFO Services for Your Business
Key Responsibilities of an Outsourced CFO
Now that we know what is an outsourced CFO, let’s see their roles and responsibilities in detail:
Financial Planning and Budgeting
- Develop short-term and long-term financial strategies.
- Establish realistic revenue and expense targets.
- Ensure money is spent wisely across different areas.
- Track financial performance to meet your goals.
Financial Analysis and Reporting
- Analyze your company’s financial performance.
- Provide clear and accurate financial statements.
- Spot patterns to inform business decisions.
- Use data to guide strategic choices.
Cash Flow Management
- Monitor money coming in and going out.
- Manage invoices and payments efficiently.
- Ensure inventory levels support cash flow.
- Plan for future cash needs to keep the business running smoothly.
Financial Risk Management
- Spot potential financial threats like currency changes or interest rate shifts.
- Evaluate how these risks could affect your business.
- Create plans to minimize or avoid financial risks.
- Maintain the company’s financial health and security.
Strategic Planning and Consultation
- CFO consulting offers expert advice on financial strategies.
- Work closely with your team to align financial goals with business objectives.
- Help plan and implement strategies for future expansion.
- Ensure financial plans support sustainable growth.
Cloud Accounting
- Set up cloud-based accounting software for your business.
- Make financial data accessible anytime, anywhere.
- Improve the accuracy and speed of financial tasks.
- Provide updated financial information for better decision-making.
Systems Automation
- Find tasks that can be automated to save time.
- Use tools like Quickbooks to improve financial processes.
- Reduce manual errors through automated systems.
- Lower expenses by minimizing the need for repetitive manual work.
Benefits of Hiring an Outsourced CFO
Knowing what is an outsourced CFO and bringing them into your business can transform how you handle finances without the hefty price tag of a full-time executive.
Here are the top five advantages of outsourced CFOs:
- Lower Costs: You save money and can continue managing your budget because you hire a part-time CFO. It’s an ideal means to avoid high salary, benefit, and bonus charges that normally are the result of big hiring bills. Your fees for a part-time CFO usually run in between $1,200 and $2,500 per day, saving over 60%.
- Expertise: This will give a financial expert with a master’s in accounting or finance minimum; however, in the majority situations, their experiences can be varied within different fields, which they offer as possible drivers of success within the business.
- Resources: Benefit from advanced financial tools and software that outsourced CFOs use. These resources can help your business make smarter decisions and stay competitive.
- Flexibility: Hire an outsourced CFO as needed, whether for short-term projects or ongoing support. This allows you to adapt to your business’s changing needs without long-term commitments.
- Scalability: As your business grows, an outsourced CFO can scale their services up or down. This is perfect for handling rapid growth, seasonal changes, or specific projects that require specialized financial expertise.
Know More About → Expert Virtual CFO Services
Is an Outsourced CFO Right for Your Business?
There are times when it becomes very hard to understand what is an outsourced CFO for your case and also to decide whether you need them or not. So, to make things easier for you, here are some scenarios to help you understand:
Are You Running a Small Or Medium-Sized Business?
This is the best option for you; if your company is growing but still not big enough to hire a full-time CFO, outsourcing CFO is the way to go. This enables companies to enjoy the elite benefits of financial leadership without incurring heavy costs.
Do You Need Financial Expertise on a Budget?
Most times, Chief Financial Officers incur serious costs when they are hired as full-time workers. In case you require very intensive financial guidance and advice but your resources are not enough to get a full CFO, then you can hire an outsourcing CFO, who will give you all that counsel at a lesser cost.
Is Your Business Growing Rapidly Or Facing Financial Challenges?
With help from a part-time financial officer, you can manage your finances better to keep your business operation on course even in those times.
Want to Better Your Financial Strategy and Performance?
If you are in an office setting and looking to improve financial planning, budgeting, or the strategy itself, an outsourced CFO can best be used while retaining the expertise that can help your organization’s performance gain.
Are You Working on Special Projects That Require Financial Expertise?
The financial decisions involved in starting a new product, entering new markets, or even financing can get really complicated.
Knowing exactly what is an outsourced CFO can guide you through every aspect of your finances that you never considered to be so important, as well as these projects, without the commitment of a full-time hire.
Ending Note!
You have learned what is an outsourced CFO in very detail now, and so you can easily determine whether it is suitable for your business or not.
Focus CPA has proficient and well-experienced chief financial officers available at your service. They are dedicated to providing you with any project or continuing support that you may require in managing your finances.
Feel free to contact us for further details on how we can help you and your business.
The cost of hiring an outsourced CFO depends on your business needs and the services you require. Usually, outsourced CFOs charge between $1,200 and $2,500 per day. This is much cheaper than hiring a full-time CFO, which can cost your business between $225,000 and $300,000 a year, including salary and benefits.
An outsourced CFO and a bookkeeper do different jobs:
- Bookkeeper: Handles day-to-day tasks like recording transactions, managing invoices, and keeping financial records up to date.
- Outsourced CFO: Focuses on high-level financial strategy, planning, budgeting, and providing expert advice to help your business grow.
While a bookkeeper takes care of the basics, an outsourced CFO helps you make bigger financial decisions.
The amount of time an outsourced CFO spends with your company depends on your needs. They can work:
- Part-Time: A few days a week or month for ongoing financial management.
- Project-Based: For specific projects like financial restructuring or fundraising.
- Hourly: Paying for the time they spend on your financial tasks as needed.
This flexibility lets you get the help you need without a long-term commitment.
If you know what is an outsourced CFO, then you already know the answer; yes. They can help raise funds.
An outsourced CFO will do it so well that your application will likely be more straightforward and greatly improve the chances of receiving the crucial funding. How? The answer is putting together financial statements and business plans, developing the proper financial model to draw lenders or investors, and a multitude of other jobs.
Both will be of benefit to you. An accountant looks after day-to-day bookkeeping and tax returns filing, whereas a CFO gives the strategic view usually required in the longer-term financial planning, and also the capital which needs to grow an organization.
If you need help understanding what is an outsourced CFO, as to whether this is the best option for you, or even if your company needs one raise? Do not think twice; give us a call-it is just a consultation away.
