Remember that financial projections play an important role in helping your company grow and not go bankrupt in its initial years. Compromising in this area can deter your business success both in the short and long term. When you hire an outsourced cfo Outsourced CFO, however, your dollar “goes farther” since you’re essentially “sharing” the CFO and only paying for the time and expertise you require. Outsourced CFOs have considerable experience in high-level corporate financial roles.
- Most outsourced CFO services (sometimes also called fractional CFO or virtual CFO services) are available at hourly or subscription rates.
- If your outsourced CFO services will be setting up a brand new iteration of Quickbooks for you, for example, then that could increase the cost of doing so.
- They have often seen companies like yours before and overcome challenges—this means you have a seasoned pro at your side to help you achieve your growth goals.
- Hiring a financial consultant can also set you up for long-term success.
What they need the rest of time is someone to look after the weekly accounting needs and the financial reporting. It takes a wide variety of specialties and skills to run all types of businesses, and outsourcing some of these roles can provide a depth of expertise and breadth of experience that would be otherwise unattainable. Either unattainable because of cost concerns, or because of the tight labor market. New business owners are often dealing with a lot on their plates, and have a hard time managing the rapid growth. If you have a lot of balls in the air, it might be time to outsource a CFO. Doing so will take the weight off your shoulders, and allow you to delegate the complexities of making business decisions to a professional.
Signs Your Business Needs an Outsourced CFO
The average salary for a full-time CFO ranges between $225,000 to $275,000 per year, plus benefits. By contrast, an outsourced CFO’s services can be obtained at a fraction of that cost, depending on the business’s specific requirements. For many high-growth businesses, the option to outsource CFO services is better https://www.bookstime.com/ than building an in-house CFO team. Moreover, they require a separate office space, employee financial and non-financial benefits, and other expenses such as insurance, office equipment, etc. All this can quickly add up to be very expensive, especially for small businesses or those working under a tight budget.
Finally, the strongest Outsourced CFOs have access to a full range of finance and accounting talent, allowing them to assemble temporary or long-term teams to achieve key objectives for their clients. Your outsourced CFO will analyze the financial statements and determine your business’s financial information and performance over time. This is vital for understanding the amount of money you have, the source, and where the money needs to go. Financial reporting helps you make the right decisions based on your business’s financial health. However, most companies wait until they experience substantial growth that presents complex financial processes and requirements to outsource a CFO.
– Capital Structure
Knowledge from their related industry could be seen positively by these services hiring companies. Scrutinizing all relevant credentials ensures that a qualified professional is taking care of the financial needs of any business seeking CFO services. In that sense, your business is actually profiting from the arrangement. The added burden of being asked to conduct an audit, or to make strategic decisions and provide finance insights to a BOD or new CEO can overwhelm an otherwise functional accounting team. When you work with a high-level finance and business advisor they can put the right processes and procedures in place to avoid overburdening the existing team.
How much financing do you need, and what combination of debt and equity will help you uphold company value while achieving the growth you desire? An outsourced CFO provides services to help you determine what capital structure is ideal for your organization. Managing the financial side of your business is an absolute necessity for any small business, whether just starting out, or trying to grow and scale. Even if you’re happy with the status quo, you still need someone to keep the financial side of things flowing, compliant, and working as an asset to your business.
