How to Make the Most of an Outsourced CFO

Your CFO is the highest paid member of your finance division. They’re responsible for accurate financial reporting, strategy, and forecasting – all essentials for any business.

However, employing a CFO in-house may no longer be necessary.

Outsourced CFOs can save a business money on several fronts, and also provide valuable flexibility. This fact has led many businesses to turn away from traditional finance team structures and embrace outsourced CFOs. Below we outline ways you can make the most of your outsourced CFO and grow your business in the process.

Why Outsourcing Your CFO Makes Financial Sense

Look closely at your CFO position. What are they getting paid? How often are they needed? Can you justify having the role in-house? Deciding whether an outsourced CFO makes financial sense for your business should be your first step.

If you decide to outsource, ensure it’ll have a positive financial benefit in both the short and long term. It won’t be right for every business, so make sure you seek advice from a trusted business advisor if you’re uncertain.

Lay the Ground Rules

You’ve outsourced your CFO, now it’s time to make sure you’re both on the same page. Be clear about their role and ensure you’re working towards shared goals. Establish a good working relationship and a set of procedures if things go wrong. You can, of course, end the working relationship if things turn sour, but this is a waste of money and time, and so it’s best avoided. Your organisational effort in the early stages will be rewarded later.

What Your Outsourced CFO Can Do for You

There are a number of duties your outsourced CFO can manage, so task them with the difficult but important jobs.

Budget and cash flow analysis is important for improving your profitability, and reviews of your contracts and bank arrangements will keep your business on the right path and free from litigation. Regular KPI analysis is also a good way to know how your business is performing against industry benchmarks.

Outsourced CFOs can also report to the board and analyse your IT operating systems. Their advice on restructuring and planning should also be valued, as they are usually experienced and boast a rich knowledge-base.

Further, come tax time, your outsourced CFO can save you substantial time and money by preparing your tax audits and offering support where needed, ensuring everything is compliant with government regulation.

Why Invest in an Outsourced CFO?

Outsourcing your CFO can save your business money on several fronts. Only paying for the work that needs to be done, without paying any sick or annual leave is in itself an attractive idea.

Where you invest these savings is an exciting conversation. Focus on problem-solving and innovation. What does your business need to prosper and how will you get it there? Ask your staff and seek advice.

What you spend your capital on will should depend on what needs to be improved most. Different reinvestment strategies include those that focus on improving infrastructure, customer support and marketing. Bolstering employee benefits, such as providing healthcare or discounts, may also prove to be highly beneficial because teams with a higher morale are more productive.

If you’re considering outsourcing your CFO, ensure it’s a sustainable strategy for your business’ situation. Contact us to discuss how outsourced CFO services could take your business to the next level.

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Mitchell Turnbull

DIRECTOR

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