A chief financial officer is the company’s official responsible for handling the organization’s finances. They head everything from financial risk management, financial planning, keeping records, and reporting on money matters in an organization.
Most companies find it convenient to hire an in-house CFO who is available round the clock to manage their economic affairs. If asked their opinion on outsourcing a CFO, they find it overly expensive.
But, some benefits come with finding financial advice from what society would call a freelancing chief financial officer. What are these perks, you ask? Let’s look at the top benefits of an outsourced CFO that come to mind.
Outsourced CFOs have a significant edge over regular ones because they have vast experience. They work with multiple organizations and in varying niches. They aren’t hinged to one company, meaning they gather plenty of intel regarding all niches.
Aside from offering financial advice, outsourcing or fractional CFO offers insight into weak spots in ongoing and upcoming projects and provides unparalleled analysis. Such details come in handy in helping your company transition to the next phase effortlessly.
Chief finance officers are the most highly paid employees in any organization. If your business is starting up, there is no need to hire an in-house CFO. This will cost you thousands of dollars you’d rather invest in areas requiring significant monetary leverage.
An outsourced CFO allows you to cut down on costs since you only get them for a few days or weeks when you need to keep your books in order. The contractual nature of your engagement dictates you pay them for the period they work for you. So, if you need a CFO for a maximum of four months each year, you save eight months’ worth of money and put it into building the business.
Regardless of your expertise in bookkeeping, finding a professional always does the trick. Trying to master complex mathematical formulas or understanding finance-related jargon-filled law can take a toll on you. Instead of taking time to learn new things on a crash program, you can hire a chief finance officer.
At times, you may have dockets of the company you’re passionate about and would like to steer them. When you hire an outsourced CFO, they offload a significant chunk of work from your shoulders, allowing you to manage other equally important tasks for the company’s growth.
When running a business, it’s vital to consider instances when you may have crisis eruptions. Whether the IRS is on your back, you have money laundering problems, or you have a significant ongoing project that doesn’t have an overseer, CFOs stand in this gap on your behalf.
Getting an outsourced chief finance officer removes the need to worry about your next move. They streamline the rough edges and help you find the most reliable tax-related lawyers to represent you before the IRS in case you are facing tax problems.
Filing taxes and following up on every financial transaction moving in and out of your business’ bank account isn’t a task for the faint-hearted. If your entrepreneurial venture grows and starts to pick up traffic, you will encounter multiple monetary transactions each month or week.
If this job becomes overbearing, you can always find a CFO who will file returns, reconcile financial statements, prepare reports, and audit the company.
Prepare Finance Documents
Any business has several financial documents that either show how much the company has, declare assets, highlight a company’s interests, or show how much money the company has shared with outside entities in a particular period.
A finance officer’s work is to prepare these documents and ensure everything is in line with the government’s regulations. Perusing through all the available intel to come up with error-free documents can be a daunting task for a regular person. But for a CFO, this is a simple task they can do in a few days.
Managing Cash Flow
For a company to grow, it is critical to share the available money equitably with all departments. It can sometimes be challenging to determine which areas need attention and which ones can work with the bare minimum.
Forecasting into cash flow problems and finding solutions to these problems are some of the critical things a CFO does to ensure you stay afloat.
Raising finances is a challenge for most companies. Finding the perfect financier with the ideal offers isn’t something every other person knows. Worse still, you may have to negotiate with a financial institution for the best interest rates.
A CFO understands the correct vocabulary to use when negotiating for business capital. Most importantly, they understand your business’s financial situation and outcomes, so they can use this intel to edge for more money than you would have.
They have expertise in dealing with multiple companies in your niche. So, they may have interacted with several bank managers and loan officers while soliciting money. Therefore, the longstanding relationships with these individuals can be used to leverage money for your company.
When your business is struggling, your first instinct is to find out which area performs lowest and get quick solutions. Unfortunately, you do not have the experience to help you dig into some of the most profound financial puzzles your company’s facing.
Instead of spending forever trying to unravel the puzzle, a better option is to find an outsourced CFO to work on it. They can effortlessly pinpoint the struggling sections and give recommendations to foster better growth and fast results.