A CFO (Chief Financial Officer) is the senior-most executive in charge of the financial management of a firm. Outsourcing CFO services give businesses ready access to experts with a wide range of financial and strategic experience. It also provides business owners with the flexibility to access that expertise as needed, rather than committing to a full-time in-house resource.
You have probably heard of outsourcing CFO services, but not only need to choose the right firm, you need to decide on the services you should outsource and understand the benefits and shortcomings of outsourcing.
What Should you Consider before you Outsource CFO Services?
The size of your company. Whether large or small, the office of the CFO is extremely important to any business. While these are not set rules, if you're a sole proprietor or run a startup with little to no existing revenue, you may benefit from CFO consulting services on a short-time basis, but you probably don't want to plan on contracting CFO services for a long-term relationship just yet. Generally speaking, almost every company that wants to grow its revenues and profits could benefit from access to a part-time CFO consultant or service. The key for those smaller businesses (as well as larger, middle-market companies) is that they’re hungry to get and use strategic financial insights driven off more accurate financial reporting and analysis.
You also need to consider if outsourcing will save you money and how much it could save you. Some consultants will charge more for their services, while others charge less depending on their experience and expertise.
Commonly Outsourced CFO Services
1. Long-term financial strategies. A CFO consultant can bring in a higher level of strategy. The CFO mostly focuses on the current state and the future of the company’s finances. With an outsourced CFO, you are sure to get fresh eyes and an understanding of complex financial and operational strategies.
2. Short and long-term financial and operational forecasting. It is important to understand cash flow and the present and future capabilities of your company. Forecasting is extremely sensitive for planning and requires detailed analysis, strategy, and practicality. Forecasting should also consider emerging trends and have room for unprecedented circumstances.
3. Budgeting. Budgeting is a more detailed day-to-day requirement in business. It is important to every institution. It details how present and forecasted operations will be carried out. A budget helps to organize the company’s finances while keeping the company moving towards its goals.
4. Raising capital and capital structure. Raising capital can be a difficult and stressful affair for any company. A CFO consultant can help raise capital for a company because the consultants usually come in with their networks. This could make for potential investors. The CFO consultant should also ensure your financials can attract investors, provide financial reports, statements and documents to potential investors, improve your reputation and confidence among their contacts and other potential investors and review term sheets and negotiate on your behalf. Once you have your capital secured, your CFO consultant also comes up with a capital structure that best suits your company.
There are many more reasons you may decide to outsource your CFO functions. For example, you may be looking to cut costs. For whatever reason you choose, outsourcing your CFO will be beneficial to your business.
You will spend less on CFO consulting than you will when you hire a full-time CFO. The prices are customized according to your service provider’s expertise and experience and the hours that they work or the services they offer.
CFO consultants ensure all financials are up-to-date and you have accurate data provided in the financials. Outsourcing your CFO functions also ensures that business owners and CEOs have time for other day-to-day matters in business.
If you are a business owner or CEO within the San Francisco Bay Area or Silicon Valley, in need of an experienced part-time CFO to help your company improve operational processes, cash flow, as well as profit margins, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.
CFO Growth Advisors (CGA) specializes in unique and highly effective growth strategies that are tailored to help companies in the San Francisco Bay Area grow more quickly and efficiently while improving sales & profit growth. Contact us to learn more.