One of the fundamentals of business growth and development is financial management. Financial management is the keystone to monitoring and analyzing all your numbers, which indicates risk areas and growth opportunities. In the business market, hiring an experienced Chief Financial Officer (CFO) specialized in your industry will provide you with all the valuable and relevant information that’s essential for your company’s expansion and growth. The only problem that many small businesses will face is that an experienced CFO is a comparatively high financial commitment that most small companies cannot afford. Now, we know that this is a very discouraging statement unless there’s an alternative that can lead you to a whole team of financial experts at an affordable cost. Read through our article to know the 4 reasons why you should be outsourcing your CFO services.
1. The Importance Of A CFO
A company’s breakthrough needs the knowledge and information that only a financial expert can deliver. Their job is to generate the essential reports and provide realistic numbers in order to push your business to grow and expand. Without this type of valuable information, a lot of crucial decisions will be made in their dark days, lacking proper financial data. This data is essential to identify your business needs, financial evaluation, and assistance to achieve your growth goals. Many small businesses will rely on their bookkeeping staff, who are overwhelmed with the company’s compliance issues, taxes, and financial spreadsheets.
They lack the experience and knowledge to help you reach the strategic financial goals that can take your business to the next level. When a business starts to grow, it becomes more challenging to keep up with the expanding financial situation, as well as the variety and huge amount of transactions.
To be held accountable for a growing business and handle the marketing competence, you must have adequate security for your financial information. Having an appropriate system that validates all tasks are accurately done, deadlines are met and ensures the lawful performance of your employees must all be on your priority list. Only a CFO has the ability to design a system that creates an optimum performance of the accounting process without exposing you to the risk of a one-person controller.
2. Hiring An Outsourced CFO Service
Businesses are built and expanded based on accurate financial data. In order to proceed in a successful business growth plan, you need a trustworthy timely financial status along with a financial analysis vision. This valuable information is transformed into data that’s essential to increase the business opportunities and profit of your company. This process has to be run by an experienced chief financial officer. However, this would cost your business a huge amount of cash to hire. For this reason, businesses can consider outsourcing the CFA role to cut down on expenses, especially in the case of small businesses.
Hiring an outsourced CFO service comes with tremendous benefits; you get to work with a team of experienced financial experts who cover all your needs within a reasonable budget. One of the greatest benefits of outsourced bookkeeping and financial functions is your key sources’ increase of productivity since there will be more room to focus on customers’ satisfaction and other efficient marketing tools that will increase productivity over time.
3. Overall Financial Plan
One of the most beneficial solutions outsourced CFO services offer is an advanced financial strategy to your company. It is specialized in designing short and long-term business plans, while other financial professionals in your company can focus on delivering current and past financial records. One of the outsourced services’ areas of expertise is determining all requirements for a successful long-term plan to scale up your business. Outsourced CFOs facilitate the workload by offering efficient solutions to enhance productivity and accountability.
The added value of the financial analysis they provide is always based on industry knowledge and experience since they have extensive access to other external resources of high experience and expertise. There’s an endless list of benefits and services that outsourced CFOs offer according to your business needs and industry requirements. Among these is risk management, raising and restructuring capital, succession, and strategic planning, and financial forecasting and modeling.
4. Cash Flow Analysis
One of the most frequent difficulties that any business might experience is cash flow. Solving cash flow problems does not only encounter revenue increase; it also analyzes how and where your company’s money is spent and what are the equitable channels of expenditure in order to increase business profit and expansion. Outsourcing CFOs helps in restructuring your company’s foundation, it dynamically reaches for every effective and core area that affects your business growth. An organizational structure plan that includes clients’ contacts, management of supply chains, vendors’ contracts, costs to revenues ratios, and price alignment according to the company and market trends. In order to analyze the company’s cash flow, budgeting is a required process since it influences a company’s financial decisions a year ahead and ensures that financial accomplishments are aligned with the company’s objectives and profit goals.
Several factors affect business growth and expansion, and one of its greatest elements is hiring a CFO to run a short and long-term financial strategy in order to set a bottom line structure for your business. One of the biggest obstacles that may hinder hiring an experienced CFO is your company’s budget since the process requires greater costs than what you’ll be committed to paying. The best solution, especially for small businesses, is outsourcing your CFO services. Hiring outsourced CFOs brings the required expertise right at your door with nearly half the cost of a full-time CFO.
Outsourced services offer your company an overall financial strategy that provides valuable industry knowledge and experience that helps scale up your business, increase productivity, divide the workload, and boost key employees’ energy at the workplace. Bookkeeping staff is entitled to deal with the company’s taxes, compliance issues, and daily financial operations. These employees cannot be held accountable for other strategic financial plans, such as cash flow management and forecasting, capital acquisition, budgeting, profit increase, market analysis and reviews, and business expansion opportunities.