When an entrepreneur’s vision transforms into a profitable venture, continued success depends not only on proper financial management, but a strategic and innovative approach. Your growing company needs to develop a strategy around its future growth. It should also be able to forecast financial needs and arrange for proper funding to eliminate any potential limitations.
Hiring a Chief Financial Officer is a smart way to deal with some of the nuances that a growing company may face. However, hiring a full-time CFO is not the most cost-effective solution. And yet, not hiring a CFO can be a detriment to any future success that a thriving business aspires to attain. An outsourced CFO can give small and large businesses the best of both worlds. It allows a company to hire a qualified CFO without the costs that come with an in-house hire.
When is the Right Time to Outsource CFO Duties?
There are several reasons a company may need a CFOs assistance, which we have outlined below. Along with the benefits of hiring an outside resource, Klein Hall proudly serves businesses, governments, not-for-profits, and individuals in the Chicagoland area, offering virtual CFO services which can provide insight into your current financial picture, and a clear plan for your financial future.
- Company Growth: Annual revenue growth and/or an increase in workforce are signs of a healthy business. A virtual CFO can make the proper budget corrections and calculations to verify you are accounting for growth in your budgets.
- Acquisitions and Mergers: Acquiring or merging with another company can disturb business finances. A virtual CFO will help keep the finances in order before, during, and after a transition.
- Going Public: Becoming a publicly traded company will require that you have all of your finances in perfect order. A financial professional can help make this process seamless, and all future goals attainable.
What Should You Look for in an Outsourced CFO?
Once you have recognized the need for an outsourced CFO, you must decide who has the right skill sets and vision to help lead your company. Beyond a Masters degree or a CPA certification, there are some other qualifications or characteristics you should look for.
• Knowledge of a company’s industry
• Complete understanding of all finance department operations
• Ability to identify and solve problems
• Ability to clearly communicate verbally and in writing
• Ability to lead and innovate
• Experience in other financial sub-industries/sectors
Benefits of Outsourcing CFO Duties
Once the “when” and “what” are identified, knowing exactly how you will benefit from outsourcing is important when moving forward. Though the significance of each benefit will vary from company to company, here are a few core advantages that every business will receive.
Cost Reduction Benefit
One of the greatest advantages of working with a third-party CFO is the money a company can save. Paying a full-time salary with benefits is an expensive investment. However, an outsourced CFO can be kept for as long or as short as the business needs. Creating cash flow that can be reinvested into products, services, or new projects.
A Chief Financial Officer can free other C-level executives, as well as employees, from financial details so they can focus on day-to-day operations, marketing, and other core competencies.
New Mindset & Outlook Benefit
Most outsourced CFOs bring the experience of working with several businesses outside of your industry. This added knowledge and experience brings objectivity and new perspectives to your company.
A virtual CFO is not only responsible for the financial well-being of a company, but also for inspiring and molding a vision for future success. Whether you are experiencing revenue growth or increasing your internal workforce, he or she can ensure your growing business does not endure needless growing pains. Unlike an in-house hire, a third-party financial officer will have a broader range of skill sets, knowledge, and experience. These attributes make a company flexible and efficient.
Contact us to learn more about how hiring Klein Hall CPAs as your outsourced CFO can benefit your business.