FAQ: Outsourced CFO Services

Why Would Your Business Need Outsourced CFO Services?

A CFO is expensive. You’ll need to find someone who combines years of experience (preferably in your industry or something similar) with the organizational skills and vision to make long-term and strategic financial decisions. This typically means a six-figure salary.

Second, it’s difficult to find this all in one person. They need to be affordable, but they should also be knowledgeable, accessible, aligned with your business goals, and preferably, they shouldn’t have plans to go elsewhere in a few years.

A CFO has to:

Match your vision for the business, not just in this quarter or fiscal year, but five or ten years down the road. They also need to be able to adjust quickly to the unexpected.
Work with people outside of the company, including investors, lenders, partners, vendors, the board of directors, and even the press and public. They must be the financial face of your business.
Understand banking, real estate, international trade, finance, taxes, unions, securities law, fraud, and how that all applies to your business (or not).
Communicate complex financial matters to a non-financial audience. If a payroll tax law changes, for example, the CFO has to explain these changes to the board of directors and the shift supervisors on the shop floor.
Navigate a business through mergers, acquisitions, labor disputes, reorganization, relocation, and major transactions.

It’s extremely risky to depend on a single financial expert who can handle all of these things and be affordable to a small or medium-sized business. Someone with this level of experience is more likely to grow into the role over time and not be found roaming the forests looking for their next job.

This poses a problem. When a business needs a cost-effective way to solve an issue and lacks an internal solution, they look outside the company.

This blog looks at the common questions businesses have when they shop for outsourced CFO services.

What Is an Outsourced CFO?

An outsourced CFO is a third party that provides the same expertise as a C-level employee but on a part-time or an as-needed basis. They may be hired for project work or through a CPS firm that also provides controller, bookkeeper, or tax consulting services. Outsourced CFO services are used by businesses to provide stability, expertise, and direction on a part-time basis when a full-time internal solution isn’t affordable.

What Does an Outsourced CFO Do?

Here’s a list:

Debt management
Raising capital
Business growth management
Financial analysis and forecasting
Budgeting
Capital purchases

Cash flow management
Financial reports
Tax strategy
Key metric and progress monitoring
Audit prep and representation
Manage bookkeepers/controllers to ensure correct financial information

While business owners and CEOs handle these functions in small organizations, outsourced CFOs can pick up the slack. This fractional approach to financial management saves a small business money by not having to pay a full-time, C-level employee to do a part-time job.

Should I Outsource My CFO Services?

How do you know your business will benefit from an external CFO? While a controller can manage a business’s day-to-day issues, the CFO needs to think much bigger. Here are some of the variables an outsourced CFO can help you work through:

Stabilize a Struggling Company

Cash flow issues, tax trouble, inaccurate financial reporting, and new industry regulations impair growth and cast doubt. An experienced outsourced CFO can assess your situation and build strategic plans that navigate your business to calmer waters.

Bridge the Gap When Key Personnel Leave

Small businesses rely heavily on the knowledge and experience of their employees. If a key employee leaves at a key time, an outsourced interim CFO handles the transition until the right person is found.

Manage Risk When World Events Impact Your Business

COVID-19 showed businesses that some global events can’t be ignored, and it took innovative thinking for businesses to survive. An outsourced CFO works with other businesses on the same issues, assesses risk, and provides the brainpower needed to solve complex problems.

Lead the Company Through Acquisitions, Mergers, and Audits

An outsourced CFO has seen it all. They know how to approach these events and have worked through them already. When you outsource, you aren’t relying on the expertise of one person—you’re leveraging the resources of an entire firm. This kind of firepower is invaluable when your business faces these events.

Learn More About Our CFO Services

Our expertise lies in working with small and medium sized businesses and nonprofit organizations to provide the accounting help they need on a scalable basis. You may not need a full-time CFO, but you should cover what they do on a part-time basis. Learn more about our outsourced CFO services and see for yourself how we fit into your strategy.

How Can Rubino Help?

Hiring an outsourced CFO is easy with the right financial partner. Our consulting services are fully customizable to your business needs. If your organization is struggling with financial decisions, Rubino will help. We offer free consultations where you can talk with our experts about your biggest pain points and how our advantages can also be yours.