Benefits of Hiring an Outsourced CFO Versus Hiring an In-House CFO

The cost of a CFO : outsourced vs. in-house

CFOs are an integral piece of the overall success of a company. Their role is to control and manage the finances, set budgets, monitor cash flow forecasts and develop strategies to best suit the business’ objectives. Reducing the likelihood of making poor money decisions that result in high liability outcomes.

Hiring a full-time in-house CFO requires recruiting fees, senior management level salary, business insurance, health coverage contributions, income tax, monthly/annual bonuses, company cars, mandatory Social Security payments, annual salary increase expectations, and severance payments.

An Outsourced CFO, otherwise known as a Virtual CFO or a Fractional CFO, can provide objective insight into a company’s financial situation without the internal bias or the obligation of internal politics. They are able to present forecasting models and share cash flow projections at the board and executive meetings without the fear of backlash. The best financial decisions can be made when data is presented in “black & white”.

Outsourcing is a way to avoid the financial impact an in-house CFO places on a company and saves time and effort spent trying to find a qualified candidate in your area. Outsourcing is a cost-effective solution.

Add value with broader knowledge

You are also adding value to a company by outsourcing, as Fractional CFOs tend to have a varied professional background giving them a wider knowledge of other disciplines and industries. 

Outsourced CFOs seek industry-specific qualifications and professional certifications in order to remain competitive and desirable to current and potential clients. Examples of such qualifications and certifications are industry-specific tax breaks, information systems (cloud accounting, QuickBooks, Xero, CRMs, ERPs, etc).

Have Short-Term Needs?

Outsourced CFOs can also be a solution to a short-term problem. For example, they can be tasked to fill in at a moment’s notice if an in-house CFO is let go, takes a leave, or resigns. Chances are they have or have had a client in a similar field and can get up to speed quickly and with ease.

They can also be a temporary solution until the company reaches the financial stability to employ a full-time financial controller. 

A CFO may be needed to help develop, execute and manage the financial portion of a business plan. Having a CFO available to advise on best practices, help make strategic decisions as well as build systems and processes during the initial growth period can make all the difference in the long-term success of a business. 

Better than your average CFO

When outsourcing a CFO you don’t just gain one individual’s network, you gain the contact list of their previous clients as well as their firm’s network. A network that may include better-suited financial institutions, venture capital firms, potential investors, potential new hires, potential clients, or customers. If a business is looking to expand internationally a Virtual CFO may have the contacts to help.

A Virtual CFO that works for an outsourcing firm has access to a variety of diverse resources within the firm. It’s impossible for an unaided internal CFO alone to provide the level of expertise and knowledge of an entire firm.

What else can a Virtual CFO do for you?

Tapping a Virtual CFO for assistance with other services can add great value to your business. Services such as Strategic Planning, Retirement Plans, Succession Planning, Financial Modeling, Financial Forecasting, Risk Management, Raising Capital and Restructuring, Financial Plans, Financial Strategy and Financial Reporting, Implement financial systems (payroll, inventory, financial management).

To sum it up, outsourced CFOs are there when you need them to provide you with sound financial advice. You get the expertise and concentration of an in-house CFO plus additional contacts and a wider knowledge base for a fraction of the cost through our consulting services. Now if that doesn’t make cents we don’t know what will.

Do you find yourself staring at financial reports and wondering what do I do next? Am I making the right decisions? How do I grow my business? Are you overwhelmed and unsure of what strategy is best? An outsourced on-site, virtual, or fractional CFO may be your best bet to getting answers.

RTA Group has a team of expert CFOs who can help with your cash flow and give you the confidence you need to bring your business to the next level. Contact us today.

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