Why Outsourced CFO Services Matter for Your Small Business

Does your small business need the services of an outsourced CFO? The answer is probably yes. Let’s consider what an outsourced CFO can do for your business and why they will help you succeed.

Outsourced CFO

What Is an Outsourced CFO?

Also known as a fractional or virtual CFO, an outsourced CFO is an executive-level employee who acts as the financial expert for a business on a part- or full-time basis. The CFO will act as a financial advisor and strategic planner for the entire executive-level team.

They are not new to the position. Most of their services recruit professionals with years of experience, so their input can be both thoughtful and supported by their years in the industry.

What Does an Outsourced CFO Do?

Outsourced CFOs will take on many tasks and responsibilities when joining your team, including (but not limited to):

  • Outlining a financial plan
  • Identifying sources of funding and capital
  • Managing cash flow within the organization
  • Establishing a path for financial growth
  • Advising board members on the financial strength of the company

Additionally, they will help businesses find a full-time, in-office CFO once the organization has grown enough to warrant one.

What Are the Benefits of an Outsourced CFO?

There are numerous benefits small businesses can enjoy when using an outsourced CFO:

  • Offers a better understanding of finances: Even if your team has a few business degrees under their collective belt, a CFO boosts your financial literacy ten-fold. A CFO can also train your existing finance teams to be more effective.
  • Helps secure funding: For companies looking to acquire venture capital funding or any other kind of investment, an outsourced CFO can help get you there. They’ll know what milestones you should have completed before applying for each stage of funding.
  • Works only when you need: Budgets are tight for small businesses, but they usually can’t warrant hiring a full-time CFO to balance their finances. Fortunately, outsourced CFOs will only work when you need them to, making sure your money is spent efficiently.
  • Prepares you for the future: They will both help you to outline realistic goals and create a path that helps you achieve them. They’ll guide you through everything you need to do to make your goals a reality.

Why Your Small Business Should Use One

Would your small business benefit from an outsourced CFO solution? Yes, it would.

For starters, not having one makes it incredibly difficult to accurately assess your finances. Sure, you or someone else on your team may have the capabilities, but do you have the time? Probably not.

Hiring such service will give you time to handle the other responsibilities of running a business while still ensuring your finances are in good hands.

Questions to Ask Your Outsourced CFO

Once you’ve hired your outsourced CFO, you will probably have a long list of questions to ask them. While you can (and should) ask all of those questions eventually, here are just a few you should consider asking right away:

  • How would you describe our current financial health?
  • From a financial perspective, what are our company’s greatest threats?
  • Do we have any inefficiencies we can cut immediately?
  • What are some success metrics we should be looking for in our finances?

Consider Your Options

Whether or not you need an outsourced CFO is ultimately up to you. Still, you should consider the benefits we’ve mentioned to help determine if your small business could use the extra hands and support of such services. We’re sure you’ll realize their value.

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