Outsourcing your CFO services sounds revolutionary, but it's actually the way that many businesses have traditionally been run. Rather than having an internal CFO position, you can instead outsource your CFO's responsibilities. An outsourced CFO service has both benefits and drawbacks, but for many companies, it will be more effective.
The Pros of Outsourcing a CFO
What exactly does a CFO do? A CFO is a financial controller. They manage the company's finances and create future strategies for the business. CFOs are ultimately responsible for the company's financial statements, and they work closely with the accounting department to provide these statements. A CFO will make regular recommendations to the company for expansion, stability, and improvement.
However, the role of a CFO is not very different from the role of an accounting partner or bookkeeping firm. Outsourcing CFO services will save a company money while also engaging a third party that can regularly audit financial statements.
Outsourced CFO services will replace the Chief Financial Officer with an entire team of financial professionals, thereby getting more done faster. A company will have access to real-time income and expense reports and other critical financial statements. Outsourced CFO services maintain a close relationship with a company and act as a supporting partner for the company.
The Cons of Outsourcing CFOs
A CFO does have a personal investment in a company, and there's a reason why many CFOs are expensive: because they add value. The right CFO will be able to innovate and direct alongside the company; they don't just create financial statements. However, this is generally true only for the largest of companies. If a company isn't already hiring a million-dollar CFO, it's likely that they are getting this type of visionary individual.
In general, investing in a CFO makes sense for very large companies that are in innovative or disruptive spaces because the role of the CFO will be substantially more involved and creative.
However, for most companies, especially small and mid-sized companies, investing in outsourced CFO services will likely make more sense. An outsourced CFO provides all of the services of a financial expert at a fraction of the cost and with additional resources to back the strategy up.
Outsourced CFO services are becoming more popular, as many people are downsizing their C-suite and operating on leaner budgets. For more information, you can contact an outsourced CFO service to find out exactly what they can do for your business.