Why You Should Hire an Outsourced Chief Financial Officer – What to Know

April 30, 2020 in CFO

All businesses, whether they are startups or conglomerates, benefit from employing a sound financial strategist. Accountants for entrepreneurs set and manage budgets, oversee forecasts. and develop strategies that will ensure a company’s liquidity and viability.

Generally speaking, this is the role of the chief financial officer or CFO. Not all companies, though, have the capital to employ someone full-time. In cases like these, the company may be best served by having an outsourced officer. Outsourcing a CFO, aside from being a cost-effective solution to a skills gap, provides a company with other benefits.

1. Outsourced CFOs are independent

Since they operate remotely, outsourced workers have little company-related bias. They can provide an independent service, which is especially important for positions that deal with company numbers and expenditures.

In-house finance officers might feel obligated to take into consideration the internal politics at their company. This can result in decisions that do not serve the company’s best interests. A CFO from outside will be less pressured in that regard and can present financial data as objectively as possible.

2. They can be a temporary solution

For companies that would prefer an internal employee, but who cannot hire one at short notice, it is a good option to have a virtual or outsourced financial officer. Businesses with resigning or a terminated finance officer can greatly benefit from having an interim outsourced one.

Aside from providing the necessary services, they can also give advice for companies that are going through a transition. CFO services can include helping a company with strategic decisions and business development. Virtual CFOs are used to working with startups or small to medium enterprises and are likely to have skill sets uniquely fit for helping new companies get started.

3. They have an existing network

Virtual CFOs, especially ones who offer freelance services on a regular basis, have large networks of contacts from financial institutions. Your company could gain access to resources, people, clients, and customers through your outsourced officer. This is valuable especially to new companies that would like to reach untapped markets.

They can also help the company find the best banks, venture capital firms, or institutional investors that will be particularly interested in your type of business. An outsourced officer with an international network can even help the company expand into another country.

4. They constantly upskill

An outsourced CFO will have a wide knowledge of other industries, as they need this to constantly gain new clients. Some CFOs have certifications outside of finance, such as in actuaries, engineering, or even law.

A particularly helpful skill is knowing about cloud accounting or online accounting solutions like QuickBooks and CRMs. A CFO who has up-to-date knowledge in information systems is a valuable addition to the company, especially one looking to be part of a competitive market.

What this means for small businesses

Virtual CFOs provide services beyond the usual budgeting, auditing, and strategizing for a firm. They can be experienced in everything from succession planning, financial modeling, risk management, and financial forecasting. They can even set up and implement financial systems for a company that is just getting off the ground. All things considered, hiring an outsourced financial officer will benefit your enterprise in the long run, and should be considered when looking at the overall financial status of your company.

For tailored CFO services, particularly for service-based businesses in Boston, MA, get in touch with us at A4E today. We offer impeccable accounting services, taking the stress off your shoulders while you grow your business.