4 minutes read

If it’s important to you to understand your financial position and know the numbers in your business, an outsourced CFO could be the answer to your prayers.

Many business owners are deterred by the relatively high price tag, with the average full time Australian CFO earning a $155,000 annual salary, However you can get the same value from a part time or outsourced CFO at much less cost and the benefits of having the right CFO on your team are priceless.  

As your right-hand person in the business, an outsourced CFO takes responsibility for your financial challenges and provides you with the data you need to make well-informed decisions, so that you can get on with running the show.

Plus, as the world struggles with growing disconnection, the option of outsourcing these high-level roles gives business owners access to a broader collection of people with the skills and attributes they are looking for.

Have you been considering hiring a new or replacement CFO for your business? Are you aware of everything the process involves? 

If you’re considering bringing an outsourced CFO into your business, read on to explore the perks you can expect.  

  • Get expert advice at a fraction of the price
  • Stop the DIY approach to finance
  • Create financial confidence and clarity
  • Enhance profit, cash flow, and business value 
  • Get comprehensive accounting and reporting systems in place

Get expert advice at a fraction of the price

The cost of hiring a locally-based CFO for your business could be immense, but with an outsourced CFO, the expense will likely be far more manageable. While a part-time CFO may charge as much as $2000 per day for their services, a full-time outsourced CFO typically costs between $2000 and $4000 per month.

Stop the DIY approach to finance

It’s quite common for business owners to attempt their own profit and cash flow planning, often without any training.  This can be, at best, a waste of time, and at worst, a real danger to your business, particularly if you base business decisions on inaccurate information and assumptions.  

As the manager of your business, you have plenty to worry about already, from delegating tasks  to your employees to ordering supplies and everything in between. With a professional taking care of the critical financial functions, you won’t have to worry about financial errors derailing your business. 

 

Cut down on the opportunity cost 

Business owners who choose to manage the financial aspects of business on their own are often motivated by saving money. However, the opportunity cost of spending your time working with data instead of investing that time into your customers, suppliers, and staff may be far more significant. 

With an outsourced CFO on your team, you’ll know that your calculations are accurate, forming a solid basis for smart business decisions. Then, with the right partner to support the implementation process, you’ll see growth in sales, profit, and cash flow.

Create financial confidence and clarity

With an outsourced CFO on your team, you’ll have more time and energy to devote to running and growing your business, as well as an advisor who can offer guidance in relation to financial decisions. This way, you’ll have more confidence that your hard work will contribute to better sales, profit and cash flow.

 One of the toughest issues in running a business is having confidence to do the things you want, such as growing your business into a new area, product or service.  You need to be sure that all your hard work to get it up and running will pay dividends and profit onto your bottom line.  

Set your prices right 

Pricing for profit is one of the most important jobs in any business, and if anyone can help you get it right, it’s your virtual CFO. The process begins with a clear understanding of the ‘true cost’ of the product or service and the margins involved, going beyond wages and basic product costs, and also takes into account the prices set by competition.  

Choosing the wrong pricing strategy (or no strategy at all) could be extremely damaging for your business and your profit margin. You need the kind of clarity over the numbers in your business that only someone with training and experience can provide.

Enhance profit, cash flow and business value

While hiring a CFO can be seen as a cost, the money business owners invest is often returned in the form of direct savings. An outsourced CFO with the right training and experience is capable of assisting business owners with everything from setting prices to managing stock, inventory and accessing growth funding. 

There are even cases where an outsourced CFO has delivered value far in excess of their hiring costs.  For example, some clients hire an outsourced CFO to assist with matters such as stock management. In one case, the CFO identified the business’ spare parts stock, which they gave away for free to people who’ve bought equipment from them before.  Because it wasn’t technically stock to be sold, this meant it could be ‘written off’, thereby reducing their tax bill. They also had some ‘floor stock/demo’ equipment which couldn’t be sold, and therefore could be written off as an asset under government stimulus.  All this added up to around $200K in financial benefit!

Get comprehensive accounting and reporting systems in place

A robust financial management system is crucial to achieving business success, but in the initial stages, competing priorities may get in the way. With the extensive experience of your outsourced CFO on your team, you’ll be able to grow your business with greater confidence and efficiency.  

If you need a fresh, objective view of growth strategies and planning without the time- and costly process of building on your own , hiring an outsourced CFO could be a great option for your business. 

Interested in the idea? Download our free cheatsheet: ‘Virtual CFOs:  A Rising Trend in 2021… And beyond?’ to learn more about the process.

 

By Sue Hirst Co-Founder CFO On-Call

Sue was managing an accounting practice when she co-founded the business in 1991. She has expertise in financial management, product and service development and human resource management.

Sue is passionate about explaining accounting concepts in clear English so business owners can make sense of their own numbers.