While large companies may have the resources to maintain an in-house CFO and finance team, many small and medium-sized businesses (SMBs) often lack the capacity or budget to do so. This is where outsourced CFO (often known as a Fractional or Virtual CFO) services come into play. Below, we'll explore the value of outsourced CFO services, the difference between an outsourced CFO and an in-house finance manager or external tax accountant, and why every business, regardless of size, can benefit from financial expertise.
Cost-Effective Solution
Outsourced CFO services offer a cost-effective solution for businesses that may not have the resources to hire a full-time CFO or finance team. Instead of bearing the expenses associated with salaries, benefits, and overhead costs, businesses can access top-tier financial expertise on an as-needed basis, paying only for the services they require. This enables SMBs to access high-quality financial advice and support without breaking the bank.
Strategic Guidance
“I hired a finance manager, and they are great at keeping the train on the tracks, but there is no proactively, no insights, and no strategic guidance”. This is a common complaint, and one that is easily explained – they are two different roles with vastly different skillsets. The final jump to CFO is a large one and you cannot expect your finance manager to perform the role of a CFO before they are ready. Having access to someone that has been there and done it is huge asset to a Founder, CEO, and Board. It’s also a huge asset for your in-house finance manager who can be guided and developed by an experienced CFO, and hopefully one day step into the role themselves.
Outsourced CFOs bring a wealth of strategic expertise and industry knowledge to the table. They work closely with business owners and executives to develop and execute strategic plans, identify growth opportunities, and optimise financial performance. By providing strategic guidance and insights, outsourced CFOs help businesses make informed decisions that drive value and support long-term success.
Financial Expertise
“I already have a tax accountant, so why would I need an Outsourced CFO”. Tax accountants play a critical role in providing specialist tax planning and compliance services. However, Outsourced CFOs are highly skilled professionals with extensive experience in finance, accounting, and business management. They possess the technical expertise and analytical capabilities to navigate complex financial challenges, such as cash flow management, budgeting, forecasting, financial reporting, debt and equity raising, investor relations, M&A, finance systems and operations. The two, vastly different, roles should work together and complement each other.
Flexibility and Scalability
Outsourced CFO services offer flexibility and scalability to businesses, allowing them to adapt to changing needs and growth trajectories. Whether businesses require strategic planning, financial analysis, or day-to-day financial management, outsourced CFOs can tailor their services to meet specific requirements. This flexibility enables businesses to scale their financial operations as they grow, without the burden of hiring and managing additional staff.
Outsourced CFO services offer a cost-effective and flexible solution for businesses seeking to access top-tier financial advice and support without the overhead costs associated with hiring a full-time CFO or other finance roles. Terms such as Outsourced CFO, CFO advisory and Fractional CFO can mean different things and are offered by people with varied backgrounds. If you're considering these services, know what you’re looking for and research the experiences of those offering them.
At cdFirst, we support CEOs, CFOs, and finance teams with a fully integrated finance team support offering, so you can focus on growing your business. Whether it's an Outsourced CFO role; outsourcing other roles within the finance function; supporting an in-house CFO with special projects; accounting, FP&A, tax, and treasury services; or investor relations support. Finance teams have a big remit these days, and every business is different – we can tailor the solution to your business’ needs. Quite often what begins as an Outsourced CFO can eventually become CFO support as your business and in-house finance team grows. Whatever the solution, we are dedicated to delivering high-quality financial advice and support tailored to the unique needs of each client.