When you run a successful business, there usually comes a point where you have grown so much that you cannot handle all the company's financial demands on your own. The business might not have the funds or capacity to hire a full-time chief financial officer (CFO), but still requires more than what a typical business accounting firm can deliver.
Even when a business can afford the hefty investment in a full-time CFO, the question remains - do you need all of those services, all of the time? Rarely is the full expertise of such an high-cost employee fully utilized throughout the work-week. Inevitably, a great deal of time is wasted on basic tasks that could be done far cheaper elsewhere.
In many circumstances, hiring a part-time CFO can be a great option. The following are five key benefits to taking this step for your growing business:
1) You’ll benefit from true expertise at an earlier stage in your company
If you held out for a traditional, full-time CFO, you would have to wait until your business is able to support the position full-time to benefit from all the knowledge and expertise a dedicated CFO can bring. By working with an outsourced, part-time CFO, you get that expertise much earlier in your company’s growth cycle. To that end, you can establish better financial habits earlier on—for greater sustainability and long-term success.
2) It helps you maintain an appropriate size and configuration of your team Using the traditional approach to hiring a CFO can prevent you from configuring your team in a way that makes sense for your company, as you may be constrained in terms of flexibility and costs. Working with a part-time CFO saves you money and allows you to invest in other important areas of your business. It’s particularly beneficial if you can work with a financial professional who can offer data entry, bookkeeping and CFO services, all in one solution.
3) It allows you to develop a more comprehensive accounting strategy Most businesses in their early stages are focused primarily on tax compliance and keeping accurate books. Although these tasks are certainly important, a truly comprehensive financial strategy should guide your company’s practices into the future and clarify your financial position. A part-time CFO can make accounting and financial planning a strength of your business rather than just another task to check off the list.
4) It helps you better manage your business’s cash Strong cash management is absolutely crucial to both growing and sustaining any type of business. If you do not have a financial background personally, you might not truly understand your profit and loss statements and other financial documents. For example, you could have high profitability, yet your company remains insolvent for various reasons. A part-time CFO will know the story behind all the numbers and enable you to develop effective strategies for better cash management.
5) It enables you to be proactive with your plans for future growth You must take your current and projected financial standing into account to be able to truly forecast and prepare for a company’s growth. An outsourced CFO helps you plan for and secure financing and determine if you should invest in new equipment or commercial space. These professionals also generally serve as crucial strategic resources to help your business grow.
A part-time CFO can be a great way to gain the financial stability and focus your business needs as it continues to grow and expand.