Chief Financial Officers or CFOs are responsible for the management and monitoring of companies’ financial activities. While some companies prefer to have in-house CFOs, others choose to hire an independent CFO. This practice is known as CFO outsourcing. In this post, we’ll take you through all the benefits of an outsourced CFO.
Independent, unbiased views on the financial status of a company
An in-house CFO may not always report accurately on a company’s financial status. This bias may stem from pressure put on the CFO by superiors. However, an outsourced CFO isn’t under any pressure, which makes accurate reporting more likely. An outsourced CFO is also a source of fresh perspectives and innovative solutions. So, if you want to know the truth about your company’s finances, an outsourced CFO is the way to go.
Savings for the company
In-house CFOs tend to be more expensive for companies as there are costs involved for salaries, training, convenience fees, providing paid leaves, and more. Additionally, companies may be legally obliged to provide benefits such as work-related resources and taxes. If a company hires an outsourced CFO, these costs can be drastically reduced without compromising on quality. All in all, it’s a win-win situation for the company.
Planning for the future based on risk assessment
An outsourced CFO can find ways for your business to work around risks in unpredictable and volatile markets. Additionally, the CFO identifies not just present risks, but future risks as well. Once these risks are assessed, the CFO can help a company plan for the future to ensure that it steers clear of financial problems. An outsourced CFO can also provide a company with sound advice as to which investments are logical and which investments aren’t.
Contribution towards management of human resources
Managing human resources is also an important aspect of business, and outsourced CFOs can help in this regard as well. For instance, the CFO can tell you the value contributed by your workforce and whether you need to hire additional talent to boost productivity. Outsourced CFOs can also help businesses in creating compensation plans for boosting the morale and motivation of employees. These plans can go a long way toward increasing employee retention and loyalty.
Assistance with legal compliance
Businesses have to adhere to the law, especially when it comes to taxes. If they don’t, penalties may be levied, which can wreak financial havoc. An outsourced CFO has the knowledge and the experience necessary to ensure that your company is always operating on the right side of the law. This ensures legal compliance at all times, which will help your business to steer clear of avoidable penalties and punishments.
Time saver for sole proprietorships
If your business is a sole proprietorship, i.e. you are the only one in charge of owning and operating the business, you simply can’t afford to ignore an outsourced CFO. Think about it – if you don’t hire an independent CFO, you’ll have to handle all financial matters all by yourself. No matter how much of a workaholic you are, this can get stressful and lead to errors. This is where an outsourced CFO can come in and help you out. Simply let the CFO handle the financial matters, so you can look after your business.
Budgets are vital for businesses as they allow financial positions to be tracked continuously. An outsourced CFO can help you out with the budgeting of your business, which will help you to supervise expenses and know the business revenue at all times. Quite simply, budgeting leads to better decision-making. From developing business goals to recruiting new talent to investing in products – budgeting is like creating a financial roadmap for the future.
Ideas for innovative product design
An outsourced CFO specializes in financial matters, but you can also turn to the CFO for ideas related to product design. After all, if you want your business to thrive and survive in the long run, your products have to continuously evolve and diversify. CFOs can help you identify things such as how much you should spend on developing a new product, whether the product is aligned with your customers’ expectations, and more. Supply chain streamlining is also something that an outsourced CFO can help you with. As a result, your business may end up saving a considerable amount of money on product development without jeopardizing product quality.
Overall growth of your business
CFO outsourcing can lead to better planning, decision-making, product development, risk mitigation, and product development. When all these things combine, they can result in a substantial growth of your business. Of course, this growth won’t happen overnight, but it’s bound to happen sooner rather than later when you’ve got an outsourced CFO by your side.
So, if you’ve been struggling to control your business’ financial matters, it’s about time you consider CFO outsourcing.