What is an Outsourced CFO? Why should you use them?
Every company needs a big team of accountants, CPAs, bookkeepers, and lawyers. Working with these professionals is crucial, as your business needs accurate financial management and adherence to accounting standards. However, in some cases, a single individual may not suffice in handling all the responsibilities. This is where an outsourced CFO comes into play.
You may be wondering: What is an outsourced CFO? In this article, we show you what outsourced CFO services are and what the reasons to use them are. Outsourcing your company’s financial functions is a good thing, as it allows you to minimize costs and, at the same time, have access to financial experts.
One of the main advantages of having an outsourced CFO is the opportunity to hire a variety of professionals with expertise in various accounting and financial fields. These individuals have many recommendations and bring a wealth of experience. In addition, employers have the flexibility to hire these professionals only when their services are required, instead of having them in their company full time.
What is an Outsourced CFO?
An outsourced CFO is a financial professional or leader external to your company providing financial analysis and support. These individuals work externally to enhance the financial, commercial, accounting, and operational aspects of your business. An outsourced CFO can be engaged on a full-time, part-time, or interim basis for specific projects.
One of the main services an outsourced CFO offers is to assess the financial health of your company and provide strategic insights to facilitate informed decision making. These professionals are recognized as experienced and trustworthy leaders. If you have a business, considering the services of an outsourced CFO is essential as they fulfill similar responsibilities as an in-house CFO, but at a lower price.
Outsourced CFO vs. Interim CFO: The difference between an outsourced CFO and an interim CFO is in their functions. An interim CFO is hired temporarily to replace a departing employee until a permanent replacement is found. On the other hand, an outsourced CFO is an external professional who joins your team and may stay on for an indefinite period. Unlike an interim CFO, the outsourced CFO is not a temporary intern, but brings in expertise from outside the company.
What Are CFO Services?
Chief Financial Officer (CFO) services include the role of a leader or chief financial officer who fulfills various roles and responsibilities within a company. This person oversees all financial activities, meticulously documenting them, and generating analysis to proactively manage debt and increase profits.
CFO services are the key to fantastic progress. Some of their services are:
- Financial Planning and Analysis
- Financial Risk Management
- Financing
- Capital Structure
- Acquisitions
- Financial Strategy and Growth
- Cash Management
- Tax Planning
The essence of CFO services focuses on the company’s financial strategy. The main objective is to ensure the financial health of the company, make informed decisions, and establish long-term stability. These services are indispensable to maintain smooth operations and mitigate major problems.
Outsourced services are considered as assets that bolster a business’s structure, finances, and organization. Usually, outsourced CFOs work on specific projects for a defined period. Once the project concludes, their engagement with the company ends, yet they remain ready to return whenever necessary- given their expertise contributes significantly to improving the company’s standing.
Why outsource your CFO?
No matter the size of your company, outsourcing a CFO is a strategic move. Handing over your concerns to an outsourced CFO allows you to focus on other parts of your company, knowing that these matters are in capable hands. In addition, these professionals have the ability to achieve higher profits and better performance.
At Evans Sternau CPA, we offer outsourced CFO services that provide the critical information required for well-informed business decisions. Outsourced CFO services are indispensable because they offer companies expert financial guidance and strategic planning without the necessity of hiring a full-time, in-house CFO.
Outsourced CFO services include cash forecasting and annual budgeting. As we emphasize at Evans Sternau CPA, this cost-effective approach empowers companies to access the specialized knowledge and expertise of seasoned financial professionals on an as-needed basis. That’s precisely why we tell you how an outsourced CFO can help you depending on the characteristics of your business:
- Entrepreneurs: If your company is in its start-up phase and your goal is to grow, having the services of an outsourced CFO becomes essential. They can help you prepare budgets, prepare forecasts, and analyze financial results. An experienced outsourced CFO can address challenges you are not yet familiar with or prepared for.
- Small and medium-sized companies: With more experience behind you, and a knowledge of your clients and services, hiring an outsourced CFO can substantially improve your company’s financial situation.
- Growing businesses: Maintaining growth requires the involvement of a CFO. This professional will communicate with investors, analyze profit margins, and evaluate customer acquisition costs, along with other key performance indicators.
- Replacing an accountant or head of finance: Bringing in an outsourced CFO allows you to strategically prepare and plan financial statements.
- Difficult business performance: A CFO advisor can offer assistance and insights on the changes needed to improve the situation.
CFO services are the key to fantastic progress. Some of their services are:
- Financial Planning and Analysis
- Financial Risk Management
- Financing
- Capital Structure
- Acquisitions
- Financial Strategy and Growth
- Cash Management
- Tax Planning
The essence of CFO services focuses on the company’s financial strategy. The main objective is to ensure the financial health of the company, make informed decisions, and establish long-term stability. These services are indispensable to maintain smooth operations and mitigate major problems.
Outsourced services are considered as assets that bolster a business’s structure, finances, and organization. Usually, outsourced CFOs work on specific projects for a defined period. Once the project concludes, their engagement with the company ends, yet they remain ready to return whenever necessary- given their expertise contributes significantly to improving the company’s standing.
What does an outsourced CFO do?
The role of an outsourced CFO includes a wide range of activities, including:
- Financial Planning and Analysis: Preparing budgets, crafting financial forecasts, exploring new scenarios, and assessing short and long-term financing requirements.
- Identifying Strengths and Weaknesses: Analyzing the financial aspects of the business to propose enhancements.
- Financial Viability Assessment: Evaluating financial feasibility, conducting projections, NPV and IRR calculations.
- Pricing and Cost Analysis: The outsourced CFO is in charge of pricing and cost strategies.
- Financial Reporting: Review of financial data reports and generation of quarterly reports.
- Negotiation: Engage in negotiations with banks and other investors on behalf of the company.
- Merger and Acquisition Opportunities: Analyze merger and acquisition opportunities.
- Regulatory Compliance: Ensure compliance with financial rules and regulations, while monitoring internal controls.
- Strategic Collaboration: Collaborate with other company leaders to develop financial strategies that support growth and expansion.
In addition, outsourced CFOs conduct business and tax consultations, facilitate scheduled meetings, provide customized standard and financial dashboards, offer annual budget guidance, monitor performance, and provide cash flow and profitability forecasts.
These outsourced CFO services, and many more, can be found at Evans Sternau CPA. We are ready to help you instantly and answer all your questions. The fastest way to get started with Evans Sternau CPA is to fill out our questionnaire. It’s time to take your business to the next level and achieve optimal results.
ABOUT EVANS STERNAU CPA LLC
Evans Sternau CPA is seeking reform in an industry where responsiveness and availability are the exceptions – not the norm.
Our global network of committed CPAs and accountants places proactive thinking at the forefront of our work. With robust service offerings and client support strategies, we are always searching for opportunities to serve your best interests.
While our philosophy is rooted in tried and trusted methods, our execution surpasses the norm and redefines the standard.
Evans Sternau CPA provides proactive tax, accounting, and advisory services for business owners, entrepreneurs and individuals with complex tax challenges. Evans Sternau CPA is for those that want year round support, not just during tax season.
