Outsourced CFOs provide part-time financial services to organizations as and when needed. They help evaluate any company’s financial standing and develop successful strategies. If you want to outsource a CFO for your company, you can try outsourced CFO services at Focused Energy. They provide many services like business strategy, budget analysis, forecasting and reporting, capital fundraising, and cash flow management. But even before contacting an outsourced CFO, you must know the types of services you can outsource. Below are 11 common services that you can outsource to a CFO:
Financial Strategy and Projections
Every company needs financial strategies and projections. These projections indicate the revenue potential for your business and help attract new investors. They are also the base for determining your budgets. Similarly, financial strategies will help you set targets and create a plan to achieve the projected revenue. An outsourced CFO will consider your company’s previous financial results and help predict how the company will do in the future. They will project expenses and revenues across all departments and help you understand your expenses.
A budget sets targets for how your company should perform every month to achieve the results predicted in the projections. The outsourced CFO will monitor whether the business is on track or underperforming. They will compare your actual financial data to the original budget and report on the current situation. They will help you calculate the difference between your budget and actual expenses to determine where you stand financially and adjust your strategy. The CFO may even offer guidance on how to correct your budgeting.
Facilitating and Understanding Financial Reports
Finances are critical to any business organization. Financial reports inform you about your current financial situation. Most outsourced CFOs will offer financial reporting, drill down, and interpretation. They will analyze the reports and share the takeaways with you. You can ask them questions, clarify doubts, re-strategize if required, and have information that will help you make critical decisions. If you don’t have a reporting system in the company, the CFO will help you create it.
Creating alternative projections that indicate how your company may perform in various situations is called scenario modeling. For instance, you can model an aggressive scenario where your business grows by 30% in a month or create a more conservative model where it grows just 5-10% monthly. The CFO can assist you in building these scenarios and predict their impact on your financial costs and results.
Raising capital is a stressful job. An outsourced CFO can help you raise capital for your company. The CFO will have contacts with a network of financiers. They can also:
- Ensure your current financials and accounting initiate positive conversations with potential lenders
- Help with structuring capital, including determining how much finances you will need and what combination of equity and debt is best for your goals.
- Help improve the team’s reputation and confidence.
- Review the term sheet and negotiate
Analysis of Cash Flow and Restructuring
Solving cash flow problems is more than just increasing revenue. You must understand what you are spending and where you are spending it. You must know which expenses are required by your organization and which can be controlled or modified. Outsourced CFOs can help you understand how to maximize your cash flow by:
- Renegotiating contracts with vendors
- Restructuring contracts with clients
- Aligning pricing with company and industry trends
- Analyzing commissions structures
- Managing supply chain
- Attributing costs to revenues
Help with Cost Cutting
Outsourced CFOs may sometimes help with strategic cost-cutting. They will have in-depth experience in your industry with various companies and be more objective.
Help with Acquisitions and Mergers
Whether you are planning a merger, a transition, an acquisition, or an asset sale, an outsourced CFO can help in:
- Analysis and reporting
- Financial forecasting
- Stabilizing financial functions
- Advising you during the entire process
- Preparing documentation
Most topics discussed in board meetings are related to your company’s finances, like business strategy, fundraising, and the annual budget. Some outsourced CFOs may attend these board meetings and lead the financial discussions with the board members. They can help members interpret numbers and handle questions, explain financial projections in detail, and present financial models.
Review Customer Contracts
An outsourced CFO can advise you on negotiating profitable contracts with potential customers. They can identify potential risks and ensure the contracts are watertight.
The CFO can help you assess your company’s financial health. They can compare it to the industry’s top-performing companies and accurately determine your business’s value. This valuation can be useful during financial reporting and planning, taxation, buying or selling companies, and equity financing.
Outsourcing CFO services can improve your business value and help you enter the global marketplace. You also save more as you will get the same knowledge and expertise as an in-house CFO at a lower cost. If you feel like you don’t need to hire an in-house CFO for your company, but need the expertise of one, outsource the services to an experienced CFO.