Last Updated on May 20, 2021 by MoneyVisual
The new norm in the startup industry is building a venture with a lean business model i.e. a potent strategy to streamline business operations with minimum wastage of processes. Having said that, a CFO plays an imperative role in assisting startups to meet their financial goals in tandem with helping them grow faster.
Howbeit, still many startup companies abstain from outsourcing CFO- the reason CFO are only for the mega players in the market.
But this trend is slowly changing! Businesses of any size can reap the benefits of outsourced CFO consulting services Sydney to gain financial stability. Additionally, the ultimate advantages of an outsourced CFO include credibility in the venture, identifying scope in the current financial plan, and implementing strategies in effective manners.
Moreover, for companies with a complex product line and a higher number of employees or which are growing rapidly, the prerequisite is CFO. As a professional CFO, its expertise will be an extensive understanding of the business model along with working with top-level employees (board of directors, banking professionals), and budgeting the company’s future financial goals. So, when you outsource CFO – you get the services minimum price without paying to a full-time CFO employee.
First and Foremost, what do you mean by outsourced CFO?
To simply put, an outsourced CFO is a CFO who works with the company on a contract basis. The person who will provide the CFO services will not be the regular employee of the venture. So, companies with a budget constraint can avail themselves of the outsource CFO services at marginal rates.
Quite possible that you may have never outsourced CFO and may be difficult for a startup to comprehend what are the major roles and responsibilities of an outsourced CFO. Therefore, we have compiled a complete list of benefits of outsourcing CFO services that will help entrepreneurs maintain good financial health as well as creating sustainable growth for their startups.
Comprehensive Data Analysis
A startup that has a data-driven approach will likely have fewer errors and more streamlined operations. And the CFO will audit the company’s current data to decide how the operational efficiency is. Furthermore, with data, the CFO expert can abet in business growth as well as amplifies its productivity. Hence, a startup with external investors should opt for CFO services to better analyze the financial targets.
Accordingly, hiring a full-time CFO can put a hole in the pocket as their prices are too high. The best-fitted resolution is to look for an outsourced CFO – offering it expertise and in-depth knowledge at economical rates. Moreover, the CFO outsourcing firm will closely work with investors and also interpret the data on a regular basis to determine companies’ KPIs.
Once your work is assigned to an outsourced CFO company, they will make sure to prepare financial reports every month including tailor-made reports, cash flow, profit and loss, and compiled balance sheet. To add, if a business gets an accurate monthly report it will aid them to build concerted strategies and set the financial budgets.
As CFO is highly experienced they can abet startups in following the latest regulations issued by the government on taxes. Furthermore, they will also ensure every business transaction per government compliance.
The most crucial step for startup success is taking an informed decision. And thus a CFO can review business in-depth details like accounting, ledgers, and customer behavior to produce result-driven insights- the business can take the actionable decision on that.
To Adapt to changes
With the everyday enhancement in technology and rapid shift in marketing trends any business would require to meet the changes. Here comes the role of the CFO, who can bring positive change with potent financial strategies in the venture.
To simply put, outsourced CFO solutions will aid in exploring new opportunities in the market as well as plan for the company’s growth. Therefore, to create your business success story, a virtual CFO can play an imperative role.
Raising Funds for Business
Particularly startups are always in dire need of funds either for product launching, to meet day-to-day expenses, and to compete in the global marketplace. The best methods to raise funds are via fundraising programs or IPO, so with an expert CFO, the work can be done in a jiffy.
They have congenial relations with investors which might help the business to get the funds for the business. Besides this, a CFO is deeply involved with business plans and projection – pitching the project to potential investors to trust these projections.
No matter! You are planning geographical expansion, or looking to add a new product or service when your CFO has the required expertise consider work is done!
When Money Matters
For any business irrespective of the size what matters the most is – meeting up the financial goals. So as a venture if you are merging with another firm or sudden business expansion is happening, a CFO can lay out the required strategies to make the transition smooth. On top of it, there are some pioneer financial plans a company has to undertake with the help of CFO to step up in the success ladder such as:
- Different methods for funding
- Focusing on companies target
- Working on sale and marketing plan
- Carrying out market research and analysis
Closely Monitoring the Overhead Costs
A CFO will ensure that the company’s resources are being utilized most effectively. An outsource CFO closely monitors the expenditure done on technologies and workforce plus how overhead expense is affecting business success.