Tags: Outsourced CFO, Outsourced CFO Services, Role of CFO, Virtual CFO, Virtual CFO Services

One of the most important aspects of running a business is ensuring that you properly manage your finances. Unfortunately, this can easily lead to the complete failure of the company— especially for smaller firms during their first year.

Due to innovations in digital communication, it’s no longer necessary to hire a full-time, in-house CFO. But, not everyone understands the benefits that a virtual CFO can provide.

Not sure where to start? Don’t worry, we’ve got you covered.

Let’s explore all you need to know about what outsourced CFO services can provide to your business.

1. Convenience

One of the primary benefits that a virtual CFO is able to provide is the convenience of employing their services whenever you need them.

Although some CFOs only offer a handful of consultations per month, many allow clients to reach out to them whenever they need to as long as it’s within their business hours.

This is particularly useful for newer businesses, as inexperienced entrepreneurs will often encounter a large number of obstacles as they get their company up and running.

So, convenience is a factor that simply can’t be overlooked.

2. Cost-Efficiency

As with most types of in-house employees, you’re essentially bleeding extra cash if your workers aren’t as productive as they should be. In some cases, even a salaried executive may not be pulling their own weight while working for your company.

To complicate this further, it’s not uncommon for business owners to pay executives hundreds of thousands of dollars per year for their services.

Since you’ll only be paying for a CFO when you need them, you’ll have no issue getting the most out of the money that you spend.

3. Industry Guidance

Many industries are full of pitfalls that business owners need to navigate efficiently in order to ensure that no complications arise in the future. For example, a business that stores its customers’ financial information needs to be particularly careful when protecting against data breaches.

As you may expect, issues associated with these scenarios can easily result in lost revenue, downtime, etc. For some companies, this is often the difference between whether or not the business survives.

Fortunately, a reputable CFO will be able to provide you with the guidance you need to avoid common issues that are present within your industry. As time goes on, you’ll become more efficient as dealing with (and preventing) them on your own.

4. Budget Development

Without a proper budget, your business won’t have the financial framework that it needs to function optimally. Considering this involves paying employees, deciding how much to allocate toward marketing, etc., it’s essential to fine-tune these numbers as best as you can.

An experienced CFO has likely worked with a large handful of businesses with similar business models, allowing them to provide an accurate forecast of how much you should spend and when you should spend it.

As your company scales, your budget can be adjusted as needed in order to accommodate your needs.

5. Optimized Revenue

Part of proper budget allocation is having a strong understanding of getting the most productivity out of every purchase.

For example, your CFO may suggest that you purchase an expensive software license early on in your company’s development. But, the increase in efficiency that this software will provide your business early outweighs the initial cost.

CFOs are also known to be a powerful tool when negotiating with vendors, something that even larger companies can benefit from significantly.

Of course, your CFO will also help you eliminate any unnecessary costs and reallocate this money in ways you can benefit from. This attribute in itself can quickly turn a failing business into a profitable one.

6. Alleviate Tax Concerns

Business taxes can quickly become a nightmare for those who aren’t well-versed in handling them. Even companies that have paid taxes for a handful of years may still find it highly stressful to manage this responsibility.

One of the best ways to streamline this process is through consistent, thorough bookkeeping, which is something that any competent CFO should have no trouble providing.

Not only will you be able to avoid penalties and fees imposed by the IRS, but you’ll also gain insight into tax breaks and deductions that you may not have known about otherwise. In some cases, this can easily save you thousands of dollars.

7. Planning for the Future

It’s not always clear which direction to take for your company. Many businesses struggle to find their niche even after a handful of years in the industry.

To complicate things further, companies often begin to encounter new issues as they scale.

With guidance from an experienced CFO, you’ll be able to establish a roadmap for your company that provides a clear-cut path for you to follow. You’ll also be able to define short-term and long-term goals that can serve as milestones.

Other considerations include how you should evolve your marketing strategy as your audience grows, how to handle and implement consumer feedback, etc.

This level of planning will objectively increase your company’s overall performance, as you’ll always have a handful of metrics to focus on attaining.

Incorporating Outsourced CFO Services Can Seem Difficult

But it doesn’t have to be.

With the above information about what outsourced CFO services can provide in mind, you’ll be well on your way toward making the best decision for you and your company.

Want to learn more about how we can help? Feel free to get in touch with us today to see what we can do.