Benefits of Outsourcing CFO Services
August 28, 2022
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Benefits of Outsourcing CFO Services
Nowadays, many businesses are investing in external CFO (chief financial officer) services rather than having their own in-house professional working full-time. This helps them to maintain efficiency on matters such as financial planning, bookkeeping, and forecasting without spending too much money on these services.
Moreover, by outsourcing your CFO services as a company you’ll be able to save time that would have otherwise been wasted managing the accounts, instead of focusing on how to grow your business. Below are other benefits of an Outsourced CFO that you should consider as a company.
It helps to cut down operating costs Outsourcing is more cost effective than having a full-time employee since you can convert a fixed cost into a variable one. You don’t have to pay the external professional every month the way you do with internal staff, instead, they only get remuneration for the task assigned to them which is usually temporary. On average, the salary of a full-time CFO is around $300,000 per year, which is a lot of money to spend for a small startup company that’s seeking to reduce costs and increase its bottom-line income for the year. However, with an outsourced CFO Service, you can reduce this cost by more than half, since the expert only works on a needs basis and not throughout.
You can benefit from their vast knowledge and experience CFOs are highly skilled professionals who have worked in different sectors of the economy and understand financial matters on a much deeper level. By hiring them part-time, you’ll benefit from the knowledge and industry insight they’ve acquired over the years to find new ways of growing your own business. Leveraging on their expert knowledge and experience, your startup company is less likely to face common growth problems that usually affect entrepreneurs, such as poor investment decisions that may lead to loss of money. Their external point of view can widen your understanding of business and open new opportunities, which would otherwise not have been possible with local bookkeeping.
They are proactive in decision-making and can help increase overall revenue. Most external CFOs don’t just focus on bookkeeping, but also provide practical financial advice on how to take your business to the next level. They often participate in activities such as; projecting revenue and creating a growth plan, identifying areas of surplus spending that the company may cut back on, and even negotiating with suppliers for reduced purchasing costs. Through these activities and others, the CFO can help a business reduce spending and increase its bottom line significantly. They won’t just record figures into your books, but will also make sure they make sense by providing sound financial advice.
Additionally, most outsourced CFOs can identify and report on the most efficient aspects of a company and provide insight on how a business can capitalize on this data to experience faster growth. They can predict the best strategies a business can use to take a big share of the market and generate sustainable income for a long period. Without an external CFO, a company runs the risk of making poor financial decisions that may affect its profit margins. While QuickBooks is currently the most popular outsourcing platform for accounts management, it still doesn’t offer the in-depth financial analysis that an outsourced CFO provides. This is the main reason why nowadays many companies are starting to hire CFOs, rather than using accounting software like
Reliable & Constant Service
Unlike in-house CFO staff who may sometimes be unavailable due to circumstances such as work leave or ailment, outsourced virtual CF (chief financial) officers are always available to meet your needs as a company no matter the time of the year. You won’t encounter any periods of off-duty that may otherwise hurt your business.
These professionals will take care of your company’s financial responsibilities as per the terms of their contract, without disappointing you with impromptu personal challenges that may impact o your business efficiency.
To summarize, it’s recommended for companies to hire external CFOs rather than employing them on a full-time basis due to the convenience that outsourced CFOs often provide. These experts are usually less expensive to hire than permanent staff, and also have vast knowledge & experience that a business can benefit from.