A Chief Financial Officer (CFO) is someone who’s designated to handle all the financial aspects of a company. They’re in charge of ensuring that all financial services limit potential risks that many businesses may face.
CFOs are vital to any business, but keeping a CFO as a salaried, full-time employee can be very difficult for organizations. Small business, especially, may not have the financial means to keep a CFO on staff at all times.
Not long ago, The Wall Street Journal searched for the highest paid CFO, and that was Google, Inc’s Patrick Pichette. His salary was a whopping $43.8 million. On a national level, the salary increase for CFOs went up almost 14% in 2014. That number continues to rise as the need for CFOs increases, and costs continue to increase in all markets.
No business - unless it’s Google of course - has that type of money to pay someone to do their financial job. Instead, all kinds of businesses, big or small, can benefit from outsourcing a CFO.
Your company can still receive quality accounting services without the strain or complexities of hiring someone full-time. From someone who can help you with payroll services to a professional who can help your business find the best tax benefits to save money, an outsourced CFO may be your answer to bringing your business to another level.
Besides the obvious cost saving benefit, there are other ways in which outsourcing a CFO can help your business grow. In fact, they can do a lot more than what you might think. Take a look at the top 3 ways that hiring a part-time CFO can make your business that much more successful.
1. Innovative and Independent Point-of-View
Full-time CFOs have the expertise and training that’s equivalent to that of an outsourced CFO. However, outsourced CFOs bring more diversity when it comes to their views and values on financial planning. They might have more diverse experiences and can offer more innovative and independent points of view.
Full-time CFOs can develop tunnel vision when it comes to making financial decisions and advisements for business. That business might be the only situation they know so they may not be staying up-to-date with all the latest trends in the financial world.
Conversely, an outsourced CFO can identify and understand specific issues that are related to your company. From there, they can develop effective plans and advise the business on the next steps towards achieving financial success.
Outsourced CFOs also maintain the understanding that no two businesses are ever the same. Analyzing the specific needs of the business organization allows them to strategically plan for financial growth as it pertains to that business’ demands.
2. Complete Financial Management Capabilities
Without the proper guidance and experience, businesses can quickly fail, regardless of how great their product or services are. Businesses should not attempt to manage their financial aspects without the help of a professional advisor.
There are many things that an outsourced CFO can do for your business on the financial spectrum. They have the experience and certification in that field, so it only makes sense that finding one to manage your finances will greatly benefit your business.
Utilizing the services of a Certified Public Accounting (CPA) firm would be a good place to start in the search for an outsourced CFO. Some of the services they can provide include, but are not limited to:
Some business owners are experts in customer service or employee retention, but if they don’t have a solid budget plan to balance cost over revenue, they might find their business in the red.
Outsourced CFOs can help develop workable budget plans to fit the business's financial needs. They can help with monitoring spending and make any necessary adjustments accordingly.
CFOs understand financial needs and areas in your business that might require changes to limit financial risks. Business owners may not see that they’re spending too much money with a vendor when they can save on that cost by going with a local supplier. These little catches can add up over time and save your business a lot of money.
Provide Training and Advisement to Accounting Staff
Outsourced CFOs have the experience in being able to train your on-site accounting staff. They may handle all the logistics when it comes to managing your business finances, but a CFO can provide proper guidance and expectations for the accountants to ensure they are consistent and aligned with your business goals.
CFOs tend to have more extensive knowledge in the financial world so having them facilitate and collaborating with your existing accounting team can make a great difference in your business.
Improve and Implement Accounting Systems
As technology continues to advance, so will the types of systems that people use in managing their finances. An outsourced CFO will ensure that your company is always using the most effective and timely systems and software that your business needs. They may also assist with creating and enforcing accounting procedures as they may progressively change, depending on the timely growth of the company.
Reconciliation and Payroll
Along with running a business, owners also have the tedious task of checking off all the little financial responsibilities. Although aspects of paying employees and paying bills are essential, they are continuous tasks that business owners don’talways have time to perform every week or month.
An outsourced CFO can easily manage and take care of all these business logistics so the owners can worry about other business components.
Preparation of Tax Planning and Filing
Outsourced CFOs have extensive knowledge of tax laws and what it means for a growing business. They can help to evaluate a business’s tax benefits as well as vulnerabilities. This way, there are no surprises along the way that could cost a business money.
They can also help you find ways to maximize your tax deductions such as accounting for mileage and meals purchased for clients on behalf of the business. Tax planning and filing are just one of many great benefits of having a knowledgeable CFO.
In the planning stages of major projects, the biggest concern will always be budget and the ability to fund these ventures. An outsourced CFO can help a business with planning and facilitating projects that are good for business growth and exposure.
For any annual events or projects, a CFO can also help with continuously improving spending habits for a business and evaluate needs based on trends in the market.
3. Time Savings, Thus Increased Efficiency and Streamlining
We’ve all heard the phrase “Time is Money.” This phrase could not be truer for any business wanting to grow and expand in the market. The more time spent on dealing with logistical issues, the more money that’s lost in customer service and business improvements.
In smaller companies, sometimes CFO and CEOs tend to take on a lot of different roles throughout the company. This happens because they believe it will save the company the expense of hiring more employees. Although they may have the experience in those components of the business, it can still pose a significant problem for the business in general. As a result, some business owners are unable to dedicate themselves to one aspect of the business fully.
Hiring an outsourced CFO will save your business so much time. This person can handle all the financial aspects of the business so you can focus on other things like employee retention or customer engagement.
Many businesses, especially those focusing on expansion, can significantly benefit from outsourcing the resources of a Chief Financial Officer. They come with the same experience, professionalism, and work ethic as a full-time CFO, but for a fraction of the cost. Outsourced CFOs provide businesses with meaningful and experienced financial analysis and consultations. They can identify issues related to your company from a financial point of view and offer direct guidance and strategies to implement protocols and plans with fidelity.
Remember, too, that you’re no longer limited to location. Many outsourced CFOs offer their services remotely in which you can receive services in a virtual format. This means that your business will be able to thrive with a CFO alongside you. Advancements in technology have offered many companies the chance to resource CFOs without the constraints of location.
Nevertheless, accessing an outsourced CFO can be a difficult task because you may not know where to find one, let alone find one that’s reliable. Your finances are critical to the livelihood of your business. Entrusting the right person with your finances is something you should feel confident in when choosing the candidate that meets your needs.
It’s important to look to accounting firms that provide not only efficient but effective services simultaneously. Doing a thorough analysis of your business is the first step towards finding the right CFO to manage your finances. Take a look at the firm’s experience and success rate with clients. These are strong indicators of their credibility and capacity to manage your company’s finances.