Most of the startup owners divert their attention toward sales, leaving the financial situation of their business at fate. A CFO is consulted when a business wants to learn more about its financial situations at hand. An experienced CFO can help you manage a flexible team while saving your business time and money.
When your startup is experiencing rapid growth and revenue, you might realize the need for a financial direction. However, when bootstrapping or expanding your services, it may not be feasible to hire a full-time CFO. But this does not mean that you can do well without one. Even if there is room for the tiniest mistakes, it can cause notable damage to your business.
The good news is, you can choose to outsource CFO services and rest assured that it won’t burn a hole in your pocket. Outsourcing CFO services is the way to reaping broader business benefits in addition to ensuring that you have a skilled resource to assist you in making long-term, strategic financial decisions.
4 Benefits of Outsourced CFO Services
Apart from the fact that it helps streamline finances, outsourcing CFO services can provide you
several other benefits such as:
1. Time-Efficiency
Whether you are the founder of a startup or the CEO of a well-established company, you will always have limited time at hand. Outsourcing financial services can take many of these responsibilities off your hand, saving you time and allowing you to focus on your actual job function.
Choosing the correct outsourcing CFO services lays the groundwork for a long-term, fruitful partnership. The outsourced CFO can become a valuable member of your team, allowing you to take a step back and delegate responsibility to someone more experienced and talented in a certain area. Instead of focusing on the financial details which you can delegate to someone else, you can easily concentrate on building your firm.
2. Cost-Effectiveness
Outsourced CFO services are a financial strategic component as well. If you are a startup or venture-backed company looking to go public or sell, you will typically have to give a stake in the company to attract top executives. Outsourcing these tasks until you genuinely require a full-time employee will assist you in avoiding any surplus expenses and ensure all the processes run smoothly.
3. Flexibility
Flexibility is extremely important for your startup as it ensures you have resources at hand in case of any emergency. With outsourced CFO services, you can scale your services and your team at will. For example, when your business grows, you can add to your resources, and if there is a dip in the industry, you can cut back on your expenses which might even include an outsourcing budget.
This flexibility allows you to escape the awkward situation of having to hire swiftly when your business picks up or lay off people when things go south. Outsourcing a CFO assists you with leadership and knowledge during unforeseen circumstances or difficult times. Outsourced service providers are used to scaling up and down quickly, and a good CFO should be no different.
4. Security and Technological Advancement
Choosing a compliant outsourced CFO firm helps ensure your startup’s financial and sensitive data safety, which indicates that your data is not shared with any unauthorized user.
Outsourced CFO services are equipped with advanced IT infrastructure that can help you gain a competitive advantage using automated processes for your business.. These solutions can become effective for your business’ strategic decisions.
Mistakes to Avoid When Picking Outsourced CFO Services
Outsourcing CFO services can be great for your business but there are some mistakes you need to be cautious of when picking these services:
1. Finding the Cheapest Outsourcing Service
If you are outsourcing services just to save costs, you might end up spending more by sacrificing the quality of work. Accounting is a business language that you should handle with care, with secrecy being your highest concern. Therefore, never outsource accounting services only to save money.
2. Trusting What they Say
You should never believe an outsourced accounting firm's words until you have properly examined their actions. Real, nowadays, is extremely rare, and many businesses make the mistake of relying completely on an outsourcing firm. It is recommended to keep a separate manager to communicate with the outsourcing company and oversee their activities, since the results are all that matters.
3. Improper Communication
Although an outsourced CFO team is well-trained and experienced, you must communicate with the remote team regularly and coach them when they are not following your vision. Whether operations are conducted remotely or locally, regular communication is key to your business’ success.
Conclusion
By bringing an outsourced CFO firm onboard with your startup, you get the required financial experience skills that help you meet your company's objectives and get the best outcomes. Since many of the outsourced professionals have worked in a variety of businesses and sectors, such as corporate, public, and nonprofit, you can anticipate high-quality services when you engage an outsourced CFO.
