Which outsourced CFO services are advantageous for your business? It is determined by your objectives. Unlike controllers and CPAs, who typically have a more straightforward job description involving record-keeping, bookkeeping, and tax management, an outsourced CFO's the role varies according to an organization's current needs, challenges, or goals.
The Most Frequently Outsourced CFO Services
Outsourced CFO firms are businesses that provide businesses with on-demand, part-time, or temporary CFO services. They are frequently called upon to elevate a company's financial strategy through the implementation of advanced forecasts or systems, to assist a company in overcoming a financial challenge such as cash flow problems or unsustainable growth, to assist a company in navigating an event such as an audit or capital raise, or to assist a company in achieving a goal such as preparing for a strategic exit or an initial public offering.
Preferred CFO boasts an elite team of some of the industry's most experienced outsourced CFOs. These professionals have decades of experience providing chief financial officer services to hundreds of clients across a variety of industries.
The following is a list of the most frequently outsourced CFO services:
1 – Financial Plan
The a most significant benefit that a CFO will bring to your organization is a more sophisticated financial strategy. While the majority of other finance roles in your organization are concerned with maintaining historical and current financial records, a CFO is responsible for developing your organization's detailed short- and long-term strategies. An outsourced CFO is an expert at long-term planning and determining precisely what is required to move your business from where it is now to where it wants to be.
2 – Forecasting in the Short and Long Term
A a financial forecast is a critical tool that any organization should have. It is the detailed financial and operational roadmap that outlines the steps necessary to get you from where you are now to where you want to be. Financial forecasts necessitate analysis, strategy, and pragmatism. It requires a strategic understanding of your company's current and future capabilities, mastery of financial algorithms and trends, and in-depth analysis of your industry's competitive landscape.
3 – Strategy & Design of Financial Systems
If your financial management software and internal systems are unable to keep up with your business's growth, are incompatible with other operational and/or sales systems and processes, or lack critical business features, it may be time to reevaluate. While outsourced CFOs do not typically implement the system, they can assist in analyzing your current systems, assessing your current and future needs, designing a system combination that is optimal for your organization's current and future growth (including tiers of implementation, if necessary), assisting in selecting and negotiating with a provider, assisting in ensuring the transition goes smoothly, and assisting in training personnel on the new systems to maximize understanding, comfort, and productivity.
4 - Budgeting
While a forecast is typically a five- to the ten-year projection of costs and operations, a budget details your projected financial statements. Even though this is a shorter time period than the strategic forecast, a budget is critical to an organization's day-to-day operations. This budget assists in guiding the organization's financial decisions throughout the year while also ensuring that the organization remains on track to meet its objectives. A strategic CFO will frequently use a forecast as a rolling budget to ensure that your financial performance aligns with your business's goals and roadmap.
5 – Financial Reporting Facilitation & Interpretation
Finances are critical to an organization's daily operations, and financial reports keep you informed of your current (and future) financial standings. Numerous outsourced CFO services include the facilitation, interpretation, and drill-down of financial reports. Allow a CFO to analyze your reports and provide you with the key takeaways in the format that best suits your business needs. This enables you to ask questions, re-strategize as necessary, stay informed of current events, and have the information necessary to make critical business decisions.
If you do not already have a reliable system in place for timely, accurate financial reporting, your outsourced CFO will assist you in establishing one.
6 – Capital Raising
While raising capital is typically a stressful process for businesses, An outsourced CFO can help make the process go more smoothly. Typically, an outsourced CFO brings a network of financiers with whom they can connect you. Additionally, an outsourced CFO can:
7 – Capitalization
How much financing do you require, and what mix of debt and equity will enable you to preserve the value of your business while achieving the growth you desire? An outsourced CFO can assist you in determining the optimal capital structure for your business.
8 – Interim Chief Financial Officer Services
If your organization is in transition, facing a challenge, or in the process of hiring a full-time in-house CFO, an interim CFO can assist you in the interim. Numerous businesses also hire an outsourced CFO for an interim role prior to hiring a full-time CFO. In these instances, an outsourced CFO can not only provide on-demand CFO strategy and services as your business grows, but can also assist in hiring and orienting a full-time CFO.
9 – Analysis of Cash Flows and Restructuring
Cash flow is one of the most prevalent (and influential) business challenges. Solving cash flow problems entails more than increasing revenue; it entails understanding what you're spending and where you're spending it, as well as determining which expenses are necessary for your organization's growth and which can be eliminated or modified. Outsourced CFOs conduct a thorough analysis of your financials to determine how to maximize your bottom line. This may include the following:
10 – Cost-cutting
Outsourced CFOs can typically achieve greater (and more effective) strategic cost savings than an in-house team, making this one of the most popular outsourced CFO services. Outsourced CFOs can be more effective for the following reasons:
They will have extensive experience working with a variety of companies in your industry, enabling them to develop a thorough understanding of the benchmarks against which your costs can be compared.
They are more unbiased. Whereas managers and teams may have a vested interest in specific projects or initiatives that may have an impact on their cost-cutting strategy, outsourced CFOs are free of such bias and make decisions based on data and experience.
Cost reductions will be more targeted. Cost-cutting is not a binary game of "large numbers are bad, small numbers are good." To achieve cost savings that are sustainable and contribute to the company's goals rather than undermine them, careful consideration, data analysis, and objectivity are required.
11 – Mergers and Acquisitions Facilitation
Whether your transaction involves a merger, acquisition, or a partial, public, the entity, or asset sale, the following helpful CFO outsourcing services may be of assistance:
