Outsourced CFOs are similar to regular CFOs, in the sense they are financial experts that are capable of creating financial strategies. The main difference is outsourced CFOs offer their services on a contractual basis. Some offer their services on a part-time basis.
Since these types of CFOs don’t work for just one company, it means they have a lot of experience. This is because they have worked with more than one organization. They work with both public companies and private companies.
Asides from that, you would have to pay a salary and benefits to an in-house CFO. Since CFOs are executives, it means the salary can be expensive. Let’s not forget to mention that annual raises have to be given.
Before we talk about the services that outsourced CFOs provide, let’s briefly talk about why companies hire them in the first place. Knowing this can help you learn why your company should use an outsourced CFO.
Companies often need a full-time CFO. However, hiring an interim CFO is a good way to manage their financial needs. At the same time, they can continue to search for a permanent CFO.
Organizations sometimes undergo massive changes. When this happens, they might hire an outsourced CFO. An example of this is if a company plans on extending their product line within a new industry. An CFO might have advice to offer on this topic.
Companies can reduce costs by bringing aboard an outsourced CFO. A CFO can help a company analyze risks and maximize profits.
Also, an outsourced CFO can aid in raising capital for a company that needs to raise equity or debt, so they can make another investment. CFOs can offer advice and they can negotiate terms.
An outsourced CFO can help with financial forecasting. Companies often have goals they want to meet. An experienced CFO can provide forecasts, based on what those goals are.
Furthermore, sometimes an in-house CFO won’t have sufficient experience in certain areas. This can pose a challenge. This is another reason why hiring an outsourced CFO is worth considering.
Those are only a handful of reasons why companies might want to hire an outsourced CFO. There are many other reasons, but those are the top ones. However, different companies have different needs, therefore they’ll want to compare a few outsourced CFOs. After comparing a few, they can choose the CFO that will meet their needs the most.