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7 Reasons to Outsource CFO Responsibilities

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The chief financial officer (CFO) position is a prestigious role, but it’s a title with a heavy load of responsibility. The person in this position will bear the blame if a business’s financial health is dire since the CFO runs all accounting and financial reporting in an organization. A CFO will be charged with making sure all transactions are properly tracked and recorded regularly.

In addition to overseeing day-to-day bookkeeping, a CFO will facilitate annual budgeting. Their financial expertise will help them make accurate projections of expenditure and income and ensure the business adheres closely to its budgets. Their expertise will also be called upon in establishing the viability of new campaigns and product lines.

As a business owner, you may not have the skills or the time to perform CFO tasks, and if you run a startup, a limited budget may prohibit you from hiring an in-house financial controller. If this is the case, you will be glad to hear that the option of outsourcing CFO services exists. 

Experience Is Hard to Find:

Finding an experienced financial accountant to engage as a full-time employee will be difficult on a startup budget. Many experienced CFOs are turned off by the profile of small or medium-sized companies. They will likely not even respond to your job ad. Most will be gunning for posts with industry heavyweights and will not be interested in growing with your business. 

It Costs Less:

An in-house CFO will expect well over $100,000, sometimes upwards of $400,000, annually for their time and expect allowances and benefits every month. Such packages are impossible to deliver for even some established enterprises. But you can benefit from the expertise of an outsourced CFO at a fraction of this cost.

You Can Focus On Running the Business:

Knowing that your resources are limited, it’s tempting to want to take on all your business tasks, from your IT issues to your books of account. While you save on salary pay, the time and effort these tasks demand are better invested in seeking out new business. Besides allowing you to focus on the bottom line, outsourcing CFO and other duties will ensure that experienced professionals handle vital financial tasks and increase accounting quality.

It Can Boost Business:  

Having a seasoned professional handling your company’s finances will allow you to focus on growing your revenue streams. That’s just one way an outsourced CFO can boost your business. A CFO can also use their expertise to show you how to cut costs, maximize your current revenue streams, or grow cash flow.

Bringing in a CFO can provide opportunities to explore new ways of conducting business and constructive criticism that will help trim your operational costs while increasing profits. 

Better Plan for Upcoming Changes:

A CFO can help you take advantage of opportunities structural changes like mergers and acquisitions can offer. They can provide objective advice on whether or not to enter into such strategic engagements. Suppose you’re thinking of raising additional capital to expand into new business lines by going public or boosting your production volumes. In that case, they will help you understand potential financial implications. 

Consulting Firms Have Connections:

Beyond improving your margins by streamlining operations, an outsourced CFO can leverage their extensive networks to help your business acquire new clients. Generating new clients will be simplified through these connections, increasing potential revenues, and partnership opportunities.

You Can Plan Your Exit:

If you think your business can benefit from new managerial blood or a new vision, you may need the skills and experience of a CFO to sell your entity at the right price. If you would still like to play a role in the business after selling, a CFO will help you negotiate your share of the company’s equity. Besides that, they will help you ensure all the entity’s financial statements are in order and ready to be transferred to the new owner.

Getting a CFO Only Makes Sense:

You’ve seen the immense value an outsourced CFO can bring to your enterprise. They will help you streamline your bookkeeping, ensuring it is in line with industry best practices. Their expertise will ensure you pass your audits and remain in the IRS’s good graces. Most importantly, your CFO will help you maximize your revenue-generating potential and take your business to the next level.

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