How an Outsourced CFO Can Help Grow Your Small Business Towards Financial Perfection

Along with saving your valuable time, outsourcing accounting and financial services are also extremely cost efficient in their operations. Besides, they also give you access to industry experts who can identify and fix your financial problems before you incur any more damage by continuing faulty processes.

Of course, you have been running your business without a CFO till now, and you may be able to continue doing that. But taking an outsourced CFO onboard can open up more opportunities for your business growth, expose new profit-generating avenues, and help establish better strategies and processes.

Let’s find out who needs outsourced CFO services and how they can guide your business to a stage of financial perfection.

Who needs outsourced CFO services?

After a certain point, your business needs a professional to guide your business towards success. However, without the advice of the subject matter expert, like a CFO, you can be making your business more exposed to risk and more significant problems.

There is still the perception that large companies are the only ones who need a CFO or can afford one to help analyze their financial stability and manage risk. Even though it is true, hiring a full-time CFO comes at a high cost. However, to survive and grow in this highly competitive and dynamic business landscape, small businesses also need an expert to lead their financial and strategic planning.

And this is perhaps the biggest reason as to why outsourced CFO services are gaining so much popularity, particularly among small businesses. They smoothly adjust with your budgetary constraints, giving you better control over the organization.

Find out how to select the right option between outsourced CFO vs. full-time CFO.

How outsourced CFOs can lead your business towards financial perfection

Here are some specific tasks that outsourced CFOs perform for your business to minimize risk and achieve financial perfection.

Annual reporting and analysis

A lot of accountants can help you prepare financial reports, but to drive valuable insights and analyze your current and future financial position, you need an expert. An outsourced CFO not only examines the reports, but they lead necessary adjustments with the planning, processes, and budgets while considering the goals of the company.

They help small businesses identify problems in the planning or budget or even processes, and take control of the situation to empower them to reach a much more stable state of profitability faster. As the business world becomes more dynamic and unpredictable, you increasingly need an expert to help you adapt and revise.

Cash flow forecasting

The cash flow statement is a common financial statement businesses prepare annually. It includes cash inflow and outflows that took place within the year to find out the surplus or deficit balance.

However, your outsourced CFO can even help you build a cash flow system to predict future cash inflows and outflows for a particular product or new investment plan. The cash flow forecasting can enable executives to make a more informed decision regarding the best investment option or project to take on. Cash flow forecasting can help your small business avoid jumping into low profitability projects.

Cost management

Various sections of business add up to the total cost, including labor cost, production cost, selling and administration fee, and advertising cost. A financial expert can enable you to understand the entire burden of each section on your overall business and help you make informed decisions. This analysis includes how much proportion of the budget is spent with a specific time and whether the organization is on right path to achieve set goals. Besides, your outsourced CFO also helps you adjust cost structure, make cutbacks to increase efficiency and profitability when necessary.

Capital restructuring

After a certain period, and when you are considering expanding the business’s new projects and initiatives, you need to make important decisions like do you need to raise funds from an investor or restructure your current capital allocation. As your business grows, its requirements, and working of systems change. Hence you need your CFO to ensure your finances are managed accordingly.

Besides, a lot of businesses also reevaluate their capital structure by the end of every accounting period. It helps them understand what adjustments are required in equity distribution to back up growth plans. An outsourced CFO can help you restructure the equity distribution, help raise funds if needed, and maintain the financial position.

Break-even analysis

Break-even analysis is often a crucial metric for small business owners or organizations who are planning to introduce a new product or project. The break-even point or analysis tell companies the amount of revenue they need to generate to be able to cover their operating expenses, such as employee salaries, equipment, transportation cost, and so on, on a certain project.

Reports that analyze your break-even point, gross margin, cost structure, and overhead expenses, enable you to better prepare for profits. An outsourced CFO not only helps you with the analysis, but as they understand your overall business processes and system, they can also guide you to lower the break-even point. So, you can achieve your business goals and objectives faster.

Assistance, planning, and expert advice

More than anything else, outsourced CFO comes with diverse experience, technical knowledge, and an extensive skillset, which makes them the right resources for assistance in business growth and financial decisions, and expert advice. As your business grows, it becomes highly challenging for one person, the owners, to continue wearing several hats at the same time. They need experts to transfer some of their financial burdens. Outsourced CFOs assist them with strategic planning, management of finances and assets, and implementation of the strategy.

Planning, revising strategizing, analyzing risk, and adjusting current systems and processes are parts of most businesses. However, your small business needs an expert who understands your company and industry from inside and out. To be able to predict necessary changes and prepares for them in advance.

Wrap up

The increasingly robust, dynamic, and competitive environment is creating new opportunities for small businesses to grow fast and make their mark. But it also opens them up to new risks. However, you can make sure you control the forces, instead of the other way around, by hiring a financial expert who can guide your business towards achieving important, long term financial and business goals.


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