3 Reasons Why Outsourcing Your CFO Makes ‘Cents’

For business owners, transforming a dream into a profitable reality is evidence of true success. As earnings increase and finances become more complex, deeper strategic advice and financial expertise is often needed to ensure that success continues over time.

However, hiring someone with the right skillset is cost prohibitive for small businesses. CFOs with six-figure compensation plans just aren’t in the budget.

But there is hope. Instead of hiring an executive in-house, small businesses are increasingly “outsourcing CFOs” which gives them access to on-demand talent without the hefty price tag.

How it Works

An outsourced CFO model involves recruiting a CFO on a part-time, temporary, or per project basis. This allows businesses to utilize valuable financial expertise, while saving money in terms of the salary, benefits, and added overhead that is typically associated with retaining a full-time financial officer. It also gives business owners the flexibility to employ a CFO for as long, or as little, as they like.

The role of an outsourced CFO may include responsibilities like overseeing financial and accounting functions, establishing a budget, navigating a capital raise or other transaction, organizing cash-flow improvement programs, liaising with accountants and lawyers, and constructing meaningful financial statements.

There are dozens of reasons to outsource – all of which give you the freedom to focus on your business and its growth. Let’s take a look at the most important.

Top Reasons for Outsourcing Your CFO

1. More efficient use of your time.
Transferring financial responsibilities to a capable party will free up valuable time that can be spent on growing your business. For example, bookkeeping can be a time-consuming process, but it’s a  a process that could easily be managed by an OCFO.  A financial professional can also most effectively liaise with your accountant or attorney on financial matters.

2. Reduced and ‘variabilized’ expenses.
Outsourced financial expertise is typically less expensive than other forms of on-demand talent, and it’s an expense that can be turned on and off as needed.  Ultimately, this model helps create a more productive use of capital. Further, the right CFO will help to budget and manage the use of cash within your company by putting guardrails in place to ensure growth and/or profitability.

3. Risk/Fraud Reduction.
A 2012 Association of Certified Fraud Examiner’s study found that the most common victims of fraud are privately owned small businesses with no more than 100 employees. Even more astounding, the median fraud amount is $147,000. That means on average small businesses are losing nearly $150,000 to fraud. This is often owed to the fact that the smallest companies don’t have access to expertise in the form of a CFO, who could identify irregular activity and unusual billing.

As you can see, an hourly, interim, or temporary CFO can benefit your business in a variety of ways. See how to hire your own on-demand CFO today.