Chief Financial Officers (CFOs) are the primary advisor to a company’s executive team. You can think of CFOs as bean counters with a flair for strategy. They handle a company’s finances so the CEO and other executives can focus on growth, innovation, and new ventures. If you are a business owner or a top-level executive at your firm, you might even be considering if an in-house CFO is fine or whether it is time for your organization to hire an outsourced CFO. But if you lead finance at your company, there is a good chance that you might feel stretched thin and overworked. Even if it feels like you have more work than time, adding another management layer may not be the best answer. Instead of hiring full-time personnel needing regular supervision, why not take advantage of an outsourced Chief Financial Officer service instead? Here are some top reasons why it is better to go with outsourced CFO services.
What is a CFO service?
A Chief Financial Officer (CFO) is an external advisor who can support your finance department or company. Having a CFO service partner can help you improve efficiency, reduce costs and risks, and make better-informed decisions. Chief Financial Officers are a relatively uncommon position in the smaller business world, with only 6% of companies having one on staff. This is because most small businesses do not require the level of financial expertise that a CFO brings to the table. However, if your company has grown to require intricate knowledge of financial operations, a CFO service partner may be exactly what you need.
Reasons why you need outsourced CFO services
Chief Financial Officers are among the most important roles in any organization. With a CFO, you can make informed decisions about your business. Without one, you are putting yourself at a disadvantage when it comes to financial management. You might not see it that way right now, but your company needs a Chief Financial Officer service. CFO services help you manage your business by handling the financial side of things so that you can focus on other responsibilities. These roles become especially important for businesses that have grown past the start-up phase and need someone with the experience and knowledge to handle their finances. An outsourced CFO service will help you streamline processes and avoid unnecessary spending to keep a tight rein on costs and expenses – something every business needs but doesn’t always get from its founders or owners. Besides the points mentioned, the following are the reasons why you should hire an outsourced CFO:
- You need to comply with financial regulations
Smaller businesses may not have the resources, time, or expertise to understand and ensure compliance with financial regulations properly. Chief Financial Officer services can help you navigate the complex financial regulations of your industry and location. A CFO service partner can also take the burden off your company administrator or bookkeeper by providing financial and compliance reports. Beyond regulations, your CFO service partner can help you understand the company’s barriers toward growth. By understanding your company’s financial challenges, your CFO service partner can provide insight into what needs to change to achieve your growth goals.
- Your company is seeking growth
If your company is growing, you need to start thinking about increasing profitability and scaling up your resources and management. A Chief Financial Officer services partner can help take the strain off your company’s current resources while guiding you toward a more profitable future. When it comes to improving profitability, your outsourced CFO service partner can help you find ways to reduce costs and increase revenue. They can also assist you with finding the right investors and financing options to help your company grow.
- You have financial reporting issues
Every company must produce accurate and authentic financial reports. Even if you have a finance department on staff, big decisions may be made with the wrong information. Having a CFO service partner can help you ensure that important financial decisions are being made with accurate information. This is especially important when it comes to making decisions about investors and financial resources. Having an inaccurate or false financial report can put your company in a difficult position and even cause you to lose funding opportunities. You may also be facing reputational issues for providing false information to investors. You can also face legal issues if you have poor financial reporting.
- You want a more knowledgeable and trustworthy Audit function
Even if you hire an expert accountant and bookkeeper to manage your process or project accounting, it is crucial to thoroughly check the records for accuracy and regulatory compliance. Having an audit function is critical to any company, even smaller ones. Your company must be audited periodically to ensure everything is handled appropriately. However, a company financial report is not the same as an audit. If you want to grow your company and increase your financial resources, you need to hire an external audit partner to help you. The best way to hire an audit partner is to hire a CFO service company that can provide you with an audit partner. A CFO service partner can provide you with an audit partner that understands your financial operation, weaknesses, and future goals.
- Your company has too much risk or too many costs
If your company has grown past the point of manageable risk, you could be causing damage to your business. If you have hired employees, you need to understand what risks your company is taking on. Without a proper management or risk management system in place, you could be putting your company in danger. An outsourced CFO services partner can help you take the blinders off and start managing your company’s risks. Professionals are often trained to see risks that may be too easy to miss. Choosing a CFO service partner who understands your business, industry, and challenges can help you identify risks that can threaten your company’s survival.
Ultimately, a Chief Financial Officer service can help you at any stage of your business. A CFO service partner can provide the financial knowledge and expertise your company needs to scale up, become more profitable, and navigate the business challenges. Whether your company needs to comply with financial regulations or you have too much risk, a CFO service partner can help you reach your goals.
Most businesses that operate on a process, service, or project basis have more complicated financial functions, needing as much help as possible to ensure nothing is missed and the data provided in the books is accurate. They need CFO services more than other types of businesses to efficiently manage their process or project accounting. Besides seeking CFO services, these businesses can also benefit from outsourcing their other accounting and bookkeeping processes. Hiring an in-house bookkeeper, accountant, controller, and CFO is expensive and takes too much time and effort that can be invested in other important business functions. Therefore, it is best to outsource the business accounting function to an expert service provider. Many accounting and bookkeeping services providers have teams of experts, including CFOs. So, you can hire only CFO services or outsource the entire accounting function as per your business’s needs. You just have to be careful in choosing the right service provider.