How to Work with an Outsourced CFO

If you’re running a growing business, the odds are that you could benefit from an outsourced CFO (Chief Financial Officer). 

But first, what is a CFO, and when do you need one?

An outsourced CFO is a professional finance executive who works closely with your team to provide valuable insights, guide all financial strategies, and help with decision-making. They bring practical experience and keep the financial side of your business in order so you can focus on your operations. 

However, this can be one of the most time-consuming and frustrating roles. Knowing how to have a smooth partnership with each other will make both of your lives easier.

This article contains some simple tips to make the most of your working relationship with an outsourced CFO.

Identify Your Business Needs

You may have heard the adage: if you don’t know where you’re going, any road will take you there. The same applies to working with an outsourced CFO.

Before looking for a new CFO, it’s essential to identify your needs. What can an outsourced startup CFO help you with? What are your goals and challenges? What are your expectations for them? 

The answers to these questions will help you:

• Set clear expectations for all parties
• Determine who to hire
• How you manage the relationship with them

Choose the Right Outsourced CFO

Like any addition to your team, you must be careful about who you hire. While picking the right outsourced CFO might be complex, it shouldn’t be difficult. 

Here are a few things to ensure your outsourced CFO possesses:

• Financial, technical, and interpersonal competences
• Experience working with businesses like yours

You will work closely with the outsourced CFO you select; check if you can imagine spending a lot of time with the individual and trusting them with your company’s most critical information. 

Your outsourced CFO must understand how your numbers affect your business goals and objectives. A background in your industry might be excellent, but experience with companies at the same stage and on similar trajectories is more critical. 

Establish Clear Communication

In many ways, your relationship with an outsourced CFO is a partnership; like any partnership, it requires communication. The best way to ensure you communicate clearly with your outsourced CFO is by setting expectations from the beginning. 

You should discuss what information you need from them, how frequently they’ll provide it, and what format they should use (such as spreadsheets, email, or other tools like dashboards or monthly reporting). Also, align on how quickly they should respond to requests for information.

You must set these expectations to ensure they understand your needs.

Finally, establish regular check-ins and reporting procedures so that you know when something goes wrong or could use improvement (or if something goes right!). Open communication will ensure that things stay on track despite unexpected issues or delays.

Collaborate on Financial Planning and Analysis

One of the most significant advantages that outsourced CFOs can provide is to help you make more informed, data-driven decisions, whether you’re just starting or have been in business for years.

Here are some tips on how to collaborate with an outsourced CFO:

• Discuss how your outsourced CFO will help you develop budgets and forecasts that reflect your company’s financial needs.
• They can also help you identify trends and opportunities impacting your industry so that you can grow.
• Collaborate on financial planning initiatives. You should work with your outsourced CFO on these projects when considering strategic initiatives like making significant investments or entering new markets.
• Move beyond gut feelings from yourself and your staff and on to data and analytics to manage your finances. An outsourced CFO can provide valuable insight into the data you collect from various systems and processes within your organization and help define additional data that would be helpful.

They can also use data analytics tools like trend analysis or predictive modeling software to predict future outcomes based on past performance. This information gives a more complete picture of what’s happening in your organization than you might get by just looking at your accounting records.

Monitor and Adjust Financial Strategies

An outsourced CFO can provide the expertise needed to track progress and identify areas for improvement, helping the business stay on top of its finances and make informed decisions. 

By regularly reviewing financial data and analyzing performance metrics, an outsourced CFO can help you assess what’s working and adjust your financial strategies to:

• Meet changing market conditions
• Capitalize on opportunities
• Address potential risks

This level of financial oversight and strategic planning is essential for businesses looking to grow and succeed in today’s competitive marketplace.

And if you’re not happy with the progress your company is making, address your concerns to the outsourced CFO. You can make the necessary adjustments to get your business back on track.

 

Searching for an Outsourced CFO?

A CFO fulfills an essential and strategic financial leadership function for a growing business. With clear communication and a great working relationship, the right CFO can play a pivotal role in financial planning and analysis, helping you identify, implement, and adapt a financial plan that works for you. 

But most startups and small businesses aren’t ready for a full-time, dedicated CFO. 

An outsourced CFO like those Founder’s CPA offers can offer a ton of benefits to both you and your business. Our experts will work closely with you and your team to develop viable financial strategies and help you make data-driven decisions. An outsourced CFO can significantly benefit you as a business leader and entrepreneur. Contact us today to get started.