Outsourcing CFO services can help you as the owner develop a solid financial roadmap before executing and save you loads of trouble.
Of course, you’ve got ideas and expectations for how things should go, but that’s rarely enough. Building a business requires creating systems and processes, especially on the finance side, that allow for the business to function without constant input from the founder.
Creating these processes can be extensive and time-consuming. Getting an expert involved as soon as possible is the best option.
However, hiring an in-house CFO is a very lengthy procedure, and not all startups can afford it. From searching, recruiting, to training – it takes time and effort before seeing results.
Further, an early-stage company probably doesn’t need a full-time CFO because the complexity simply isn’t there yet. Your new CFO might even get bored.
So, how can you get the help you need without hiring a CFO?
There is an easy and affordable option – outsourced CFO services.
When engaging a virtual CFO, you can expect the same professional service as hiring one internally and more.
Outsourcing CFO Services Allows for Dedication to Your Finances
Your outsourced CFO is not someone who merely performs startup accounting services.
They are your financial partner and understand your business like an in-house CFO. It’s their job to plan your finances and manage your financial risks while providing valuable insights for your decision-making.
Expertise in the financial and accounting areas is crucial to pinpoint your organization’s weaknesses. With your outsourced CFO, you can build solid financial plans that work for your business goals.
They also focus on the budgeting and forecasting aspects of your company. They handle financial activities that are vital for financial planning and analysis. Plus, since they know the capital structure of your business, they can quickly determine your company’s financing needs.
In short, together, you can implement financial strategies that work for your business.
It is understandable for startup founders to be reluctant about getting a virtual CFO. You may worry about a lack of communication if the person isn’t 100% dedicated to your company, or if you don’t see your CFO in person due to a virtual setup.
However, that won’t be a problem with an exemplary provider. A competent, outsourced CFO:
- Knows how to communicate with clients regardless of the physical setup
- Quickly answers questions
- provides advice that is relevant for the future financial performance of the business
- directs your business with specific and clear financial guidance
Moreover, outsourcing CFO services allows you to benefit from the advice of more than one expert. Multiple knowledgeable people can combine brainpower behind the scenes to help you create the most effective strategies.
One of a CFO’s most important jobs is presenting and reporting accurate financial information, internally and externally.
Internal reports are essential for management to make financial and strategic decisions aligned to their objectives. These reports also help investors understand the business’s financial status – where things are going, and the challenges faced.
Aside from internal reporting, your startup likely has external reporting obligations, taxes and SEC filings have strict deadlines as well.
Rest easy knowing that your virtual CFO will never miss a deadline. For them, time is one of the key ingredients in creating an efficient financial strategy.
Outsourcing CFO Services Keeps Your Eyes on the Future
Because of the intense focus on now, startups sometimes struggle to give the future enough attention. Naturally, you’re most worried about the immediate operational aspects of the business. You want to make sure that the general operation of the company is working smoothly.
However, you might miss many opportunities if no one has eyes on the future.
A clear strategy is crucial for your success. The CFO focuses on creating financial systems that spur long-term growth and development.
Financial systems covering short, medium, and long-term planning create a growth roadmap for the teams to follow:
- A regular forecast covering the next 3-6 months
- An annual budget
- 3-5 year business plan
With these tools, your company’s financial management, funding, and compliance will always be on the right track.
Getting Your Money’s Worth
First, assess all your company’s financial needs to determine which CFO services you require.
If your company isn’t large or complex enough to require an in-house CFO, an outsourced CFO is a great option. Some of the services that an outsourced CFO can provide are:
- Annual financial planning
- Developing and implementing financial systems
- Regular reporting and financial advice
When you outsource CFO services, you can choose the specific services your business needs and only pay for those. Thus, the cost of outsourcing a CFO is lower than hiring an in-house expert. You might even get better service without shelling out too much money.
On top of that, getting an outsourced CFO with startup experience has an additional advantage. Because they bring experience from multiple organizations in a similar position to yours, they’ll have good ideas of what works and what doesn’t.
Looking for the Right Startup-Focused CFO Solution?
The CFO is one of the key players in any organization’s success. But, especially for a young company, hiring an in-house CFO can be prohibitively expensive.
An outsourced CFO lets you benefit from many pros without the cons. By selecting only the services you need, you’re able to tailor the experience (and your price tag).
At Founders CPA, our team of financial experts provides outsourced CFO services exclusively to startups and early-stage businesses. Your startup can likely benefit from CFO services, but why not book a free consultation to find out?