Your business is humming along, your staff is in place and you have customers paying for your product. Why, you might ask, would I ever want to hire an outsourced CFO?
The short answer: problem-solving. Sure, CFOs are focused on financials, like their titles imply, yet their expertise in economic matters can help solve a range of other business problems faced at different times by companies at all stages, start-up, mid-level or beyond. Also, outsourced CFOs offer on-demand assistance, typically for short durations of time, meaning their benefit to an organization is more affordable than full-time staffing.
Here’s a list of some of the main areas in which outsourced CFOs can benefit businesses:
1. Financial planning: This is probably the first thing thought of when someone mentions CFOs. And for good reason, of course. Chief financial officers are experts at strategizing financial steps companies need to take in order to achieve their business goals.
2. Financial forecasting: Outsourced CFOs provide both short- and long-term analyses as needed for any project or business plan. To accomplish this, CFOs are adept at understanding the markets in which their companies are operating, as well as a range of factors that can influence business outcomes in the future.
3. Raising capital: Outsourced CFOs can help provide the all-hands-on-deck attitude needed to raise debt or equity capital. Your outsourced CFO can develop financial models that assist in determining valuations and stand up to scrutiny during tough investor due diligence. They help strategize and assist with due-diligence obligations, and outsourced CFOs also negotiate term sheets and perform other fiscal duties related to raising funds. And, it should be noted, outsourced CFOs typically are connected to a wide group of capital investors across a range of industries, too.
4. Helping with cost-cutting measures: Outsourced CFOs bring an objectivity to cost-cutting that isn’t always achieved by in-house perspectives. Also, outsourced CFOs typically have a broad background in working with multiple organizations trying to accomplish the same thing. This means they often have a good grasp on what works and what does not when companies are faced with one of the hardest business tasks they can undertake.
5. Assisting with mergers & acquisitions: A prime benefit presented by outsourced CFOs is their ability to provide much-needed executive manpower for big events. And few events are bigger than those in which companies experience M&A. Outsourced CFOs provide the objective, mission-focused support needed on everything from preparing needed documentation to facilitating communication among all affected company departments.
6. Solving any other problems: A company’s success is built on its foundation of financials, so it only makes sense that financial experts like outsourced CFOs are so effective at solving a lot of company problems, whether they are tight margins, solving inefficiencies or overcoming cash-flow problems. Outsourced CFOs have a unique and wide-ranging skill set to objectively analyze an issue and present plans for solving any problems it might present.