Outsourcing a C-suite role may seem like a risky choice. After all, the people who hold leadership titles are guiding the direction of your business. From the visionary role of the CEO, to the operational granularity of the COO, to the technical insights of a CTO to the financial strategy of a CFO, all the C-suite roles are important to the growth and profitability of your business.
If you find your business lacking in the CFO role, you may ask, how can an outsourced CFO truly know the ins and outs of my business, team, and industry?
For businesses that don’t have high-level financial insights in-house but want that knowledge without paying the large salary and cumbersome benefits like stock or ownership, an outsourced CFO can solve that problem. Without strong, insightful leadership in your finance and accounting departments, your business could be left hurdling toward risky scenarios.
Outsourcing a role as important as the CFO requires expecting the benefits and limitations of outsourcing, understanding how an outsourced CFO can work with your existing team, and knowing the right time to bring in an outsourced CFO.
What can I expect from an outsourced CFO?
While saving your business money can be one of the many benefits of working with an outsourced CFO, finding the right person to collaborate with your business can provide exponentially more benefits.
If your business needs elevated financial insights and knowledge, here is some insight into how outsourced CFOs work with their clients. Typically, they will start with an initial assessment of your business.
When beginning work with a new client, outsourced CFOs start by analyzing the accounting processes and suggesting potential improvements. They can implement time-tested systems for your business based on similar solutions that have shown success with other clients.
An outsourced CFO will help interpret your company’s information and work with the existing team to create strategies, implement tools, and align the vision and daily activities of the finance and accounting departments with your long-term business goals.
Because outsourced CFOs have experience with multiple technology platforms, they can also provide a high-level understanding of the pros and cons of different technology systems to consider. Frequently, a fresh set of eyes can illuminate areas of inefficiency in your business that may have become so much a part of the daily operations of an accounting department that they go unnoticed.
During their initial assessment phase, an outsourced CFO ensures that plans and strategies are set, challenges are brought to light, and changes and improvements are recommended. Especially in times of growth or change, these initial assessments are essential to improving the accuracy of financial reporting that supports the impactful decisions being made.
Past their initial assessment, an outsourced CFO provides many other benefits to your business, including:
- Strategic planning
- Exit strategy
- Cash flow management
- Years of experience
- Transparency
- Technology insights
Strategic Planning: The fresh perspective of an outsourced CFO can provide high-level strategic guidance to optimize revenue growth in new, innovative ways.
Exit Strategy: If your business is planning for an exit, an outsourced CFO can help you present your company’s finances to get the best possible valuation.
Cash Flow Management: If your business struggles with cash flow issues, there may be hidden inefficiencies, accounting practices, and operational issues that the outsourced CFO can address.
Experience: An outsourced CFO with years of professional experience will be highly skilled and can provide a detailed analysis and plan to address existing financial issues.
Transparency: Many business owners don’t have the clarity to grow their business because they either don’t receive or can’t interpret their financial reports. An outsourced CFO can help interpret the company’s information and work with its management team to create a successful strategy.
Technology Insights: An outsourced CFO can help your business find the most efficient tools to streamline reporting and internal processes while reducing wasted hours in your accounting department.
How will an outsourced CFO work with my existing team?
In their initial assessment, an outsourced CFO takes the time to truly understand your business, allowing them to properly collaborate with the existing team while putting the right processes and procedures in place to avoid overburdening them. Additionally, an outsourced CFO can see areas where technology may help streamline existing processes so your accounting staff can do what they do best and stay clear of mindless, time-consuming tasks.
An outsourced CFO can also help the existing leadership by serving as the CEO's finance and accounting coach, providing expertise and future-facing guidance for your business.
When should we bring in an outsourced CFO?
The best time to bring in an outsourced CFO is not in a time of crisis or in a last-ditch attempt to correct a failing business. Instead, it is best to seek help in times of growth and prosperity when there is bandwidth and enthusiasm to create better processes and procedures to support growth and innovation.
However, if your business is in or approaching a crisis, it is not always too late. An outsourced CFO will have navigated similar crisis situations before and can implement successful strategies based on experience in multiple industries. Trying to hire in-house during a crisis can result in hasty, careless choices that may or may not be right in the long-term for your business.
Is engaging with an outsourced CFO right for my business?
Consider how your business has grown or changed over the past six months, 12 months, or even three years. Have you adjusted and elevated your business strategies to meet those changes? Are you asking challenging questions of your leadership and staff? Are you taking time to value a CFO’s insights and use them to guide your business toward new opportunities?
It takes all areas of expertise to run your business. The CFO role is not one to be handed off to an already overburdened CEO or controller. With an outsourced CFO from Citrin Cooperman, you can receive high-level financial insights without giving away equity in your company.
Ready to learn more about outsourced CFO services? Get started today.
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