How Outsourced CFO Services Can Amplify Your In-House Accounting Team
According to business mentorship organization SCORE, 82% of business failures can be attributed to poor cash management. Proper management of a company’s cash flow, financial risks, and other aspects of financial planning are all key to business success.
For many businesses, especially those growing and expanding, relying merely on an in-house accounting team may not be enough to manage their long-term financial goals. In these situations, investing in outsourced CFO services can help amplify the financial capabilities of your company.
We discuss in this article the role of outsourced CFOs and the benefits they provide to your accounting team and overall operations.
The Role of an Outsourced CFO
An outsourced CFO’s duties and responsibilities are the same as those of an in-house CFO’s. What makes them different is that they work on a contract basis. They are most useful for companies that don’t have the budget to hire a full-time CFO.
Outsourced CFOs are expected to provide the following services:
- Review and present financial results to the management team
- Provide cost control measures
- Provide cash flow forecasting
- Make or recommend capital acquisition decisions
- Manage the company budget and establish inventory control
Apart from doing their expected role, outsourced CFOs add value to your company and accounting team in the following ways.
Establish Cash Management Systems
Outsourced CFOs can establish effective cash management systems. This includes managing cash cycles, improving collections, watching over debt obligations, and making sure the company can invest in new projects.
Other financial responsibilities include:
- Establishing sustainable revenue
- Managing payroll
- Seizing opportunities in the market
- Financing ongoing investment for business growth
- Making smart capital expenditure
Your accounting team can also perform these responsibilities, but outsourced CFOs streamline the process, making it easy for your team to do their job.
Outsourced CFOs can also handle specific tasks so your accounting team can focus on more pressing matters. This will be useful during a company restructure or expansion.
Offer Financial Expertise
CFOs are financial experts who can share valuable knowledge on financing, leasing, and smart purchasing. Most outsourced CFOs are trained and certified to offer expert assistance to your teams.
CFOs can boost your accounting team’s financial knowledge and comprehension. Your team will learn to make important financial decisions or ensure the protection of critical business processes if major problems arise.
Act as a Credible Liason
Another important advantage of having an outsourced CFO is that they can liaison with other financial professionals and institutions on your behalf. During such interactions, the CFO ensures that:
- Financing terms are beneficial to you
- All financial statements and documentations meet bank requirements
- The company establishes, cultivates, and preserves vendor relationships
Having a dedicated CFO gives your company and accounting team credibility, which is valuable when securing funding. Their knowledge and experience put you in a much stronger position during negotiations.
In some cases, the operations and accounting departments tend to distance themselves from each other. CFOs are in the unique position of bridging the gap. CFOs can provide financial insights to other departments in the organization.
At the same time, they can also fill the leadership position in your accounting team, especially during critical situations like a company-wide restructuring. CFOs take the lead when it comes to overseeing tax and compliance efforts like:
- Minimizing compliance costs
- Managing overall risks
- Mitigating exposure with tax authorities
Aid in Mergers and Acquisitions
Mergers and acquisitions can be especially challenging, not just for accounting teams but for the entire company in general. With CFOs, you’ll have someone managing the assembly of necessary departments to complete the merger or acquisition.
Whether your organization is raising capital, in the process of selling, or trying to acquire a smaller business, CFOs can prove helpful at every stage of the process. Here are some of the ways a CFO can be beneficial:
- Integrating multiple accounting departments
- Establishing accounting systems and processes
- Documenting and evaluating existing procedures
- Assessing and interviewing key financial staff
- Crafting a comprehensive integration plan
CFOs focus on a company’s future by helping the accounting team anticipate change, build consensus, and deal with surprises. CFOs are problem solvers who assist your organization in moving forward with integrity and transparency.
Quadrant Advisory offers reliable professionals and services to help optimize your company’s financial systems. If you want to learn how our CFO services can help your business, sign up for a free consultation with us.