What Is an Outsourced CFO?

An outsourced CFO (chief financial officer) is a highly experienced financial consultant who works as the CFO of a company without officially being hired as a senior executive. Such service is usually provided to businesses needing top-level management support in the area of finance but not willing to commit to the full-time hiring of the CFO.

An outsourced chief financial officer has the capability to assist business entities in various areas such as understanding and interpreting their financial results, forecasting more accurately, ensuring effective cash flow management, investment appraisal, fundraising readiness, and generally advising on major financial decisions.

What Does an Outsourced CFO Do?

The responsibilities of an external CFO depend on the company’s needs, but commonly include:

• Financial planning: Developing budgets, forecasts, and financial models.
• Cash-flow management: Monitoring liquidity and helping businesses plan future cash requirements.
• Performance analysis: Reviewing KPIs, margins, revenue, expenses, and profitability.
• Strategic decision-making: Providing financial insight for pricing, hiring, expansion, and investment decisions.
• Fundraising support: Helping prepare financial models, investor materials, and funding scenarios.
• Financial reporting: Improving management reporting and financial visibility.

When Should a Business Outsource a CFO?

Businesses outsource CFO services mostly to gain a fresh perspective, or when they start running out of space in the financial department due to new products or expansion. It also makes sense to do so when they need better financial forecasting, or the company is undergoing some kind of major change, e. g., a buyout, a merger, a restructuring, or anything major like that.

CFO outsourcing can be particularly useful for startups and growing businesses that need senior-level financial expertise without the cost and commitment of a full-time executive.

Outsourced CFO vs. Internal CFO

A contractor CFO who is a CFO by profession delivers CFO services from the outside without getting into the company in a contractual arrangement. They are usually hired for flexible or part-time periods. However, an in-house CFO is a full-time employee of the company at the level of senior leadership. One of the two CFOs- an external one and an internal one- a company needs to choose based on its size, level of financial complexity, strategic needs, and resources. Both have their pros and cons, but the decision will ultimately depend on which will best meet the company’s needs.

Why Use External CFO Services?

External CFO services give businesses access to experienced financial leadership while allowing the level of support to scale with their needs. CFO outsourced services can also provide an independent perspective on financial performance, planning, and business strategy.

Whether a company works with an outsourced CFO company, an individual CFO outsourced professional, or a team of Outsourced CFOs, the goal is to turn financial information into actionable business insight.

Want Help With Your Finance and Accounting Operations?

Atidiv provides accounting, financial reporting, finance operations, and CFO outsourcing support for startups and growing businesses. Our finance professionals can help strengthen forecasting, cash-flow management, reporting, and strategic financial planning.

Talk to an Atidiv expert to explore outsourced CFO support tailored to your business.