When it comes to running your business, you do so by not only understanding what you need for success and growth, but also by making decisions that best align with your company’s mission as well as your budget. Because of this, some companies are moving away from traditional executive-level titles in their offices and instead outsourcing select positions. One of the most popular is outsourced CFO services.
What Is Outsourced CFO Services?
Put simply, outsourced CFO services, otherwise known as CFO for hire, refers to a financial expert who provides financial strategies and services on an as-needed basis instead of being employed full time by a company. For instance, this individual may work part-time hours, or they may work on a per-project basis instead. Typically, these individuals have previously worked as the CFO of other companies and helped them grow successfully.
What Is The Purpose Of Outsourced CFO Services?
There are plenty of reasons why it may make sense for your company to outsource your CFO needs.
Growth
If your company is currently experiencing growth, you may not need someone staffed full time. For instance, if you are adding new products or services to your portfolio, it may make sense for you to hire a CFO who has experience with those products or services instead of someone who doesn’t. Using someone on an as-needed basis allows you to get the insight and information you need from an experienced professional without having to pay this individual’s salary full time.
Interim CFO
If you had a full-time CFO and that individual is no longer with the company, you may turn to an outsourced CFO until you can fill that full-time need. This ensures the financial side of your business is still receiving the expertise and insight it needs to thrive without forcing your company to fill a position too quickly.
Issues
If you have had financial issues in the past or you may be experiencing some upcoming red flags, a CFO for hire can help you address these issues and make necessary suggestions to help your company get in a better financial situation. Typically, due to their experience, these CFOs for hire may have handled these specific issues at other companies they’ve worked for, allowing you to gain real-life hands-on experience.
Cash Flow
Sometimes a company may be hard-pressed for cash, and this is when an outsourced CFO can come in handy. Not only can this trusted professional use his or her expertise to help you get back some positive cash flow, but using this individual on an as-needed basis allows you to remove a full-time salary from your debts.
How is a CFO for Hire better for my bottom line?
Hiring a professional on an as-needed basis is always a better move financially than hiring someone full time, but there are more reasons why a CFO for hire is better for your bottom line.
Salary And Benefits
When you hire a CFO full time, you not only need to pay them a salary, but you also need to offer them benefits, both of which means money out of your pockets. And since this person will be working full time, you also need to keep that salary and those benefits in mind all year round. However, when you outsource a CFO, you only pay them when you use them, and you don’t need to offer this person benefits. Both of these are a major cost savings for companies in the long run.
Expertise
Think about all the experience and skills you need a CFO to have for your business. Chances are, you would need a team of people to meet your requirements, and that’s just not monetarily possible. However, when you instead opt for outsourced CFO, you have access to a wide range of professionally skilled individuals who can help you out no matter your business or situation. Having access to a wide assortment of resources ensures you get the best answers and best assistance possible, and you get it all for the fraction of what you would pay an in-house CFO.
Miscellaneous Expenses
Aside from a salary and benefits, hiring someone internally also means miscellaneous expenses. For instance, you will likely give this person an annual raise or a bonus, and this is money out of your pocket again—but you don’t need to give raises or bonuses to outsourced help. In addition, if the CFO gets other perks, like a company car or company phone, these are other expenses that become your responsibility.
Conclusion
If you are looking for ways to cut back on your bottom line while still getting the assistance and expertise you need, consider the benefits of an outsourced CFO.
