Nowadays, many businesses are investing in external CFO (chief financial officer) services rather than having their own in-house professional working fulltime. This helps them to maintain efficiency on matters such as financial planning, bookkeeping and forecasting without spending too much money on these services.
Moreover, by outsourcing your
I) It helps to cut down operating costs Outsourcing is more cost effective than having a fulltime employee, since you can convert a fixed cost into a variable one. You don’t have to pay the external professional every month the way you do with an internal staff, instead they only get remuneration for the task assigned to them which is usually temporary. On average, the salary of a fulltime CFO is around $300,000 per year, which is a lot of money to spend for a small startup company that’s seeking to reduce costs and increase their bottom line income for the year. However, with an outsourced CFO Service you can reduce this cost by more than a half, since the expert only works on a needs basis and not all throughout.
II) You can benefit from their vast knowledge and experience CFOs are highly skilled professionals who have worked in different sectors of the economy and understand financial matters on a much deeper level. By hiring them part-time, you’ll benefit from the knowledge and industry insight they’ve acquired over the years so as to find new ways of growing your own business. Leveraging on their expert knowledge and experience, your startup company is less likely to face common growth problems that usually affect entrepreneurs, such as poor investment decisions that may lead to loss of money. Their external point of view can widen your understanding of business and open new opportunities, which would otherwise not have been possible with local bookkeeping.
III) They are proactive in decision making and can help increase overall revenue. Most external CFOs don’t just focus on bookkeeping, but also provide practical financial advice on how to take your business to the next level. They often participate in activities such as; projecting revenue and creating a growth plan, identifying areas of surplus spending that the company may cut back on and even negotiating with suppliers for reduced purchasing costs. Through these activities and others, the CFO can help a business reduce on spending and increase their bottom-line significantly. They won’t just record figures into your books, but will also make sure they make sense by providing sound financial advice.
Additionally, most outsourced CFOs have the ability to identify and report on the most efficient aspects of a
IV) Reliable & constant service
Unlike in-house CFO staff who may sometimes be unavailable due to circumstances such as work leave or ailment, outsourced virtual CF (chief financial) officers are always available to meet your needs as a company no matter the time of the year. You won’t encounter any periods of off-duty that may otherwise have a negative effect on your business.
These professionals will take care of your company’s financial responsibilities as per the terms of their contract, without disappointing you with impromptu personal challenges that may impact
To summarize, it’s recommended for companies to hire external CFOs rather than employing them on a fulltime-basis due to the convenience that outsourced CFOs often provide. These experts are usually less expensive to hire than permanent staff, and also have vast knowledge & experience that a business can benefit from.