Ever feel like your finances are a bit…chaotic? Like your bookkeeper is teetering on the edge of a nervous breakdown, or you’re constantly struggling to figure out if you can afford to invest in more headcount?
If your financial management involves a lot of crossed fingers and guessing games, it might be time to bring in someone who’s better suited for the job. Enter the CFO (Chief Financial Officer).
Here’s the catch: a full-time CFO might not be in the cards for you. So what do you do? Outsource!
Keep reading to see how you can fill this strategic role and reap the benefits of outsourcing CFO services—without the full-time price tag.
What does a CFO Do?
A Chief Financial Officer is an executive-level leader who ensures a business remains financially healthy. That’s to say, they spend their days:
- Overseeing fundraising
- Finding investment opportunities
- Putting together financial reports
- Managing the business’s financial activities
- Partnering with your FP&A team to compare financial performances with performance indicators
Since they play such an important role in protecting your business and driving growth, you can’t just hire anyone. You need someone who has the right knowledge and experience to lead your finances.
The thing is someone who is that seriously skilled also demands a seriously big paycheck. As a small business, you might not have the budget to bring that person on, even if you need the help they provide.
That’s when you should start looking into outsourced CFO services.
Top benefits of outsourced CFO services
If you’re weighing whether to opt for in-house or outsource CFO services (also known as fractional CFO services), there are a few benefits you’ll want to keep in mind.
1. Lowered costs
Brace yourself for this one. The average CFO salary in the United States is $445,500 a year.
Are your eyes back in your head? Jaw off the floor? While in-house CFOs work hard to earn that salary, that’s not realistic for your small business books.
Meanwhile, outsourced CFO services are a fraction of the cost, saving you huge bucks while still reaping the benefits of their expertise.
2. Expertise & resources
Speaking of expertise, outsourcing a CFO can actually give you access to more knowledge than you think.
Since outsourced and fractional CFOs haven’t been limited to working at just a few companies or within a single industry, they can quickly learn your business and hit the ground running using the wide array of knowledge they’ve gained while helping their clients.
3. Flexibility
With an outsourced CFO, you’re not tied to a strict process or stuck finding work to keep them busy—you just partner with them when you need to.
Going through a growth stage that requires heavier financial guidance? Your CFO can be more hands-on. Have a slow season that doesn’t drum up as much business? They can offer a plan for making it through those months and step back until you need to check in.
4. Objective insights
It can be easy to look at your finances through rose-colored glasses—but that doesn’t always lead to the best decisions. An outsourced CFO can objectively look at the state of your finances and offer advice with no agenda besides helping you succeed.
5. Reduced risk of fraud
Unfortunately, if you’re managing your finances on your own or with a business partner, there’s a chance your money can go missing or end up in accounts it has no business being in. Your CFO can carefully read your financial statements and track your financial activity to catch red flags and limit any chances of fraud.
6. Saved time
You’re busy running every other aspect of your company and don’t have enough time to deeply focus on finances.
Besides, who do you think can produce a financial forecast faster? You—a smart business owner who might just be lacking some in-depth financial knowledge— or an outsourced CFO—who has been doing them for years?
You can trust a fractional CFO to handle all your financial tasks so they’re off your plate and you have more time to dedicate to running your business.
7. Support for your bookkeeper
It might be that a one-person finance team isn’t cutting it anymore. If you already have a bookkeeper on staff, outsourced CFO services can provide more help in analyzing your finances and planning for the future as you grow and have more numbers to crunch. One person can’t always do it all!
8. A leader during periods of growth
You’re hiring more staff, you’re getting more sales, and you have no clue how to sustain it all. A fractional CFO can guide your growth periods by updating key financial statements, using them to inform future strategies, and ensuring you’re scaling as successfully as possible.
9. Some to guide overall financial strategy
An outsourced CFO will look at your financial statements (or put them together in the first place), examine industry trends, and account for your business goals to develop specific strategies that will reduce risk and guide business decisions.
10. Accurate financial reporting & forecasting
Your financial statements need to be complete and accurate if you’re going to use them to gauge your financial performance and influence future business decisions. A fractional CFO can prepare those documents, make sense of them for you, and offer advice based on your specific goals.
Your external CFO uses a deep understanding of your strengths, weaknesses, competitors, and industry to build data-driven predictions of what your finances will look like in the future—from a few months to a few years. With that insight, you two can partner to develop a plan to accomplish what you want in the short term and long term.
11. Risk management
Outsourced CFOs have a wealth of industry and market knowledge, so they can see roadblocks and potential challenges well before they happen. That means they’ll be able to counsel you about how certain financial decisions will impact your business—and ensure you make choices that don’t pose a threat to everything you’ve built.
Why do businesses outsource CFO services?
If you’re still on the fence, make sure to go through this checklist. If any (or all) of the following conditions apply, it might be time to consider filling that leadership role.
- You’re too small to need a full-time CFO.
- You need someone to handle money.
- Your bookkeeper has more than they can handle.
- You need a leader during periods of growth.
- You’re barely staying afloat.
Grow your SMB with an expert on your side
Whether you’re still in your start-up era or you need a fresh perspective on your books, getting the help of a CFO is never a bad call. But until you have enough workload for them—and are ready to dole out that salary—outsourced CFO solutions offer the same benefits for a fraction of the cost and commitment.
At Hiline, we act as an extension of your team and partner with you to deliver expert guidance and prepare you for a successful financial future. From financial forecasting and go-to-market budgeting to revenue and fundraising planning, we help you stay on track as you grow.
Let’s work together so you can confidently make decisions about your business.
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