As small businesses grow, financial management becomes increasingly complex, and those doing the books during the business’s fledgling years may lack the expertise to handle the changes. Allowing them to continue without the right skills will be a very costly mistake, as the availability of accurate financial reports, forecasting, budgeting, and account monitoring are crucial to growth and profitability.
The best way to tackle this problem is to find a financial expert whose expertise expands past basic cash accounting – that is, a CFO.
Basic cash accounting, of course, never loses its importance; the role of a CFO is more strategic, and their advice and skills can lead to improvements in generating reports, more streamlined processes, stronger budgeting, and more accurate forecasting.
Because CFOs are costly, however, hiring an outsourced CFO is a better “deal” than hiring a full-time, in-house CFO.
No one can predict when you’ll need the services of a CFO, but there are several times you’ll need outsourced CFO services.
Your Finance Reports Aren’t Timely
Many critical decisions depend on timely financial reporting. You cannot, for example, budget for new technology without having the ‘big picture’ of your finances. Unfortunately, interpreting reports can be a time-consuming task, and your other finance employees may lack time to do so. Luckily, interpreting reports is part of a CFO’s expertise, and they’ll ensure you have the information you need on time.
Your Workforce is Growing
As you gain new employees, you’ll have to comply with different legal rules; for example, any business with more than 50 full-time employees must offer health insurance, and failing to do so incurs fines. A CFO, well-versed in business law, can help you plan for such instances.
You’re Planning to Expand
As you grow, you may start looking for partnerships and expansion opportunities – or they’ll find you – and both investors and lenders will want to examine your financial reports. An outsourced CFO prepares comprehensive reports and keeps them updated so they’re available to investors, potential partners, and lenders when needed. CFOs, as financial advisers, will help you decide if a partnership/expansion is ‘worth it’ or if you should pass; they’ll also help identify market opportunities.
Whether you can afford a full-time CFO or not, you’ll find yourself in plenty of situations where you’ll wish you had a CFO’s expertise – and when you do, remember outsourced CFO services are available. For more information about outsourced CFO services, contact us today.