For many small businesses, bookkeeping is an afterthought and don’t even ask about making financial plans for a stable future. But the reality is, all businesses could benefit from a CFO no matter the size of the operation.
CFOs offer financial insights that keep you in business and running at peak efficiency. Unfortunately, CFO salaries are not feasible for most small businesses.
That’s where outsourced CFO services come in. This blog will teach you the way to low cost, effective CFO services via outsourcing.
Top Benefits of Outsourced CFO Services
There are many benefits to deploying a strategy that includes CFO outsourcing. Here are some of the ones that small businesses appreciate the most:
Managed CFO Services are Affordable
When you implement outsourced CFO services you are saving money.
The average salary of a full-time CFO is over $300,000 a year. That’s a lot of dough for a small business who struggles to make cuts to increase bottom line revenue year over year.
But CFO outsourcing can be done on a part-time or as needed basis. This puts CFO services well within the reach of small businesses.
When businesses partner with a CFO they increase revenue. In 2018, tech CFOs are expecting more than 80% increases in revenue, alone. It’s hard to imagine this kind of success would be had without someone at the helm of a company’s finances.
Because CFOs are responsible for all aspects of company finances, they have the ability to make a serious impact on revenue and fast. Here are some of the things that CFOs do to increase revenue right away:
- Negotiate with vendors for lower costs
- Invest in software that makes the business more efficient
- Offer transparency of bookkeeping and finances
- Cut back on extras that a company doesn’t need
- Help increase production through strategic investments
- Project revenue and create a plan for growth
With all of these things considered, having a CFO, even part-time, is good business.
Better Time Management
Bookkeeping is frustrating for many business owners. It’s a time-consuming process, and if it’s not in your wheelhouse it can seem difficult or tedious.
Yet in order to run your business, you have to keep the books neat and tidy. Good bookkeeping gives you visibility over your financial lifeline.
As such, business owners pour a lot of their own time into accounting. With outsourced CFO services, you can reclaim your time, knowing you are leaving your books in the hands of a trained, educated professional who is passionate about your success.
Tax Time is Easier
For any small business, taxes are the elephant in the room. You’ve known you have to pay them, but pulling together all of your receipts and expenses can be a time-consuming all-encompassing process.
With clean, organized bookkeeping strategies, tax time gets easier. If you have a part-time CFO they can take taxes off your plate completely. What’s easier than that?
Implement a Financial Strategy
Being a small business operating without the right financial strategy can feel like you are flying blind without a safety net.
But when you implement CFO outsourcing, your on-demand CFO will use your current finances and long-term goals to create a strategy that works for you.
This includes looking at every facet of your business for productivity and efficiency.
Implementing a financial strategy with a CFO makes your business run better.
Learn About Cost-Saving Technology
Part of the nature of the job for a CFO is to seek out new technology that optimizes cost savings. This could be a new piece of foundational bookkeeping software or something more industry-specific.
Your CFO will get to know your business model and apply their knowledge of cost-saving technology to make recommendations that save you money and increase your bottom line.
Don’t Be Without Answers
Not every small business owner has the luxury of getting an on-demand financial consultation from a savvy executive. But with managed CFO services, it’s like having a CFO in your back pocket.
How many times have you wanted to know the answer to something, only to get online and find you are more confused after searching for it?
With a CFO to guide you, you will never be without the financial answers you seek.
How Do You Know if You Need a CFO?
If you’re a small business it’s likely you never considered a CFO until now. But how do you know if you need one? Here are some signs to keep an eye out for:
How Behind Are You?
If you find business efficiency, and namely the timeliness of important business decisions, is delayed because the proper information and reports have not been prepared. It’s a good time to think about CFO services.
When businesses start to fall behind they can use managed CFO services to get back on track and excel the business to the next level.
Does Your Competition Have One?
There’s no magic number that says when you hit this revenue goal you will benefit from a CFO. Some $10 million companies require CFOs while other $20 million companies do not. It varies wildly and depends on the industry.
A good indicator that it’s time to CFO-up is if your competition has one. If other companies in your industry that do about the same in revenue are implementing CFO strategies it may be time to get one of your own.
Does Your Company Inspire Trust and Respect?
Having a dedicated CFO at the helm of your company, even in a part-time capacity, can inspire trust and respect from customers, vendors, and others outside of your industry.
If you don’t have an established record of trust outside of your core industry, and you are looking to be seen as a leader in what you do, a CFO could be a good choice.
Are You in Growth Mode?
Rapid growth, while mostly desirable, can be scary for a small business who hasn’t laid a foundation of scalability. If you are hitting rapid growth mode, it’s time to call a professional.
Traits of an Outsourced CFO
If you’re a small business owner who has someone looking after your books, you may think you’re ahead of the game. And you probably are!
But having someone who isn’t specifically trained to manage your finances as a bookkeeper could be a risky decision.
Here are several traits of a small business CFO that business owners should keep in mind:
Outsourced CFO services are hands-on. Hiring a CFO to do your bookkeeping means having someone go through your books with a fine-toothed comb, as the saying goes.
A CFO won’t just record numbers into your database, they will make sure the numbers make sense. And if they don’t make sense, a CFO will implement strategies that do.
On-demand CFOs are highly available to meet your needs. When you have another employee in charge of the books, it’s usually someone who also has other responsibilities.
But a CFO is dedicated to your business finances since they are such an important part of the business.
Educated & Experienced
A CFO is educated and experienced. Outsourced CFO services are done by certified professional accountants (CPAs) with executive level experience with businesses like yours.
Having a CFO means having proactive service at your fingertips. Different from a professional like a tax accountant who is only available to make recommendations around tax time, a CFO is always looking for proactive solutions to help your business.
You may think you can get by without an educated, experienced, professional CFO. But when you hire a CFO on-demand you’re getting someone with experience, education and the soft skills to do the job right the first time.
Is CFO Outsourcing Right for Your Business?
Every small business can benefit from having a CFO implement cost-reducing, profit-building strategies.
That’s especially true for businesses that are experiencing any of the following:
- Having trouble getting documents together to make decisions
- Entering rapid growth mode
- A desire to establish trust and respect; and
- To keep up with the competition
If you think your business would benefit from a CFO, give ScaleFactor a call today. Our bookkeeping and consulting services offered by certified professionals will help your business grow.
We offer all the services of a CFO:
- Automated online bookkeeping
- Billing and invoicing
- Compliance and governance needs; and more
If you aren’t sure what your business needs are in terms of outsourced CFO services, we can help. Give our experts a call to learn more.