What is the role of a CFO?
The Chief Financial Officer (CFO) is the individual responsible for overseeing a company’s finances. They are responsible for tracking and giving regular updates on financial metrics, reviewing and analyzing key performance indicators (KPIs), building budgets, creating forecasts of financials, guiding plans for future growth, board deck review and financial slide creation, evaluating financial hygiene and recommending best practices to improve position.
Your outsourced CFO will fulfill this same strategic role – but instead of joining your company as a corporate officer, they will work with you on a contract basis. Most outsourced CFO services are available at hourly or subscription rates. Even if your business is still growing or just looking to run lean during these uncertain times the value of strong leadership and good financial advice should never be underestimated.
In the past, a CFO was one step above an accountant but times have changed now they are expected to have a holistic view of the business, especially when considering the future while preparing an organization that is “future-fit” for business whilst improving cash flow & profitability. A lot of growing companies make the mistake of thinking they don’t need a CFO until ready scale or sell but their great deal of value can bring table a long point many financial experts argue most important duty identify business
How to find the right outsourced CFO for your company
Step 1: Determine your business needs
Ask for referrals: Tap your network of service providers, fellow founders, advisors, and incubators/accelerators/co-working spaces for recommendations on potential candidates.
Check fit: Don’t necessarily jump at the first person or firm you meet – take fit into account and check credentials, background experience, and skill sets against your business needs.
Check out the client list: Ask candidates for the names of clients who are representative of the range of services offered; this will give you an idea of their expertise in working with businesses similar to yours in terms of industry stage etc.
Step 2: Consider age and experience benefits
When selecting an outsourced CFO, age and experience can be taken into account to ensure that the candidate has the right skills and background necessary for the job. It is important to compare candidates based on their credentials, background experience, and skill sets needed for your business.
It is also important to consider fit when selecting an outsourced CFO. Don’t jump at the first person or firm you meet; take into account their ability to meet your company’s needs. Additionally, check out their client list for evidence of experience working with clients similar to yours in terms of industry stage, etc.
Step 3: Define needed industry knowledge
1. Determine the type of industry your business operates in and the challenges it may face financially.
2. Identify what knowledge an outsourced CFO needs in order to make sound financial decisions based on your industry’s specific needs, such as market trends or competitor strategies.
3. Look for candidates who have experience working in similar industries and have proven their ability to handle similar financial challenges successfully in the past.
4. Ask interview questions that will help you gauge their understanding of your industry and how they would approach financial decisions related to it if hired for the position
Step 4: Look for top-level financial controllers
1. Look for someone who is a good communicator: You need someone who is able to translate financial jargon into language everyone can understand and who can communicate well with both internal team members and investors.
2. Find someone who gets along well with others: Your CFO should be able to fit in well with your existing leadership team so they can work together effectively.
3. Ensure they have experience solving problems: You need someone who has experience solving difficult problems in the past so they can provide trusted advice when you run into trouble in the future.
4. Ask about creative strategies used to overcome challenges: Make sure your candidate is able to share examples of how they overcame challenges in the past, as well as any internal controls that have been put in place to ensure the accuracy of financial statements or reports generated from them (e..g double checking).
Step 5: Calculate the perks
1. Determine the financial perks you would like to offer your outsourced CFO. This could include healthcare, a 401K, social security, disability, and pension options.
2. Calculate how much these perks will cost on average per year in terms of their salary.
3. Add any additional costs such as office perk costs (personal office space or parking space), relocation expenses if needed, and/or severance package if needed/requested by the candidate
4 . Determine how long it will take for these investments to recoup their money by calculating how much money is being spent per month on average for these perks combined with any other major purchases that need to be made within that timeframe
Step 6: Do research on the potential CFOs available in your preferred price range.
1. Do your due diligence and conduct research on potential CFOs in your preferred price range. Look for recommendations from other business owners, as well as any relevant experience they may have.
2. Use your personal and industry connections to find suitable candidates; ask them if they know anyone who could be a good fit for the position or if they themselves are interested in applying for it.
3 . Utilize websites like LinkedIn or dedicated recruiting sites to widen your search for qualified candidates in need of a job, taking into account their experience level and overall fit with your company culture.
4 . When selecting a candidate, take into consideration their soft skills (communication, teamwork, etc.) as well as their hard skills (financial knowledge, etc.). Make sure they have both before committing to hiring them.
5 . Make sure you are getting the right person not only for the job but also for your team by taking time out to ensure that everything is perfect before making an offer..
What to consider when finding an outsourced CFO
1. Professionalism and Confidence
When finding an outsourced CFO, professionalism and confidence should be considered. An outsourced CFO service should provide you with the best value and quality possible, as well as help you to facilitate growth by optimizing your financial processes and presenting them in a way that can wow investors.
To ensure that you get the best value for your money, it is important to research each potential candidate thoroughly so that you can find someone who will provide reliable services that meet all of your needs. Additionally, it is important to trust in their expertise so that you can have confidence in their ability to handle all aspects of the job effectively.
2. Knowledge and Experience
1. Ask about their background: When interviewing an outsourced CFO, ask them about their past experience and how it relates to your business model, capacity, and team dynamics.
2. Evaluate their knowledge: Once you’ve assessed the outsourced CFO’s experience level in your industry or business model, consider how well they understand your startup’s needs and expectations.
3. Inspect their recommendations: Review any recommendations they make for improving processes or introducing new systems so that you can assess whether it aligns with your goals for growth and profitability.
4. Consider long-term benefits: Consider how valuable their insight will be over time as they gain more familiarity with your company’s unique needs and requirements; this will help them provide better guidance as time goes on!
3. Professional Qualifications
When finding an outsourced CFO, it is important to consider their professional qualifications. These include:
• Experience working in your industry
• Ability to customize reports as per the information you process
• Understanding of board and investor perspectives
• Certification and licensing credentials
• Relevant references from past clients
4. Company Reputation
The reputation of a company can affect finding an outsourced CFO in several ways. First, a company with a good reputation will be able to find experienced and qualified candidates for the job.
Second, customers who already rely on the company for their products or services may also feel more comfortable working with them for financial reporting services as well.
By having a good reputation, companies can easily find outsourced CFOs who have experience in the field and know how to handle the specific requirements of their client’s businesses. This helps ensure that businesses are getting quality work from professionals who understand their needs and are able to meet them efficiently.
5. Pricing
Outsourced CFO services generally price their services based on the scope of services needed. You may see fees by day, week, or month, with most providers creating a custom quote based on your specific needs. The spend can range from $1,200-$2,000 per month for an outsourced CFO role. Contrast this with the average CFO salary of $225,000 to $275,000 per year (salary + benefits).
The savings can be even more significant when you consider an integrated outsourced finance department with a bookkeeper and fractional controller as compared to hiring a full-time CFO who may take home over $350K annually.
Some CFOs provide part-time packages which include financial reporting/basic plans for around $250-$300 per session; benchmark reporting from$1000+ depending on the size of the firm; and monthly packages from$300-800+. There are no advertised package deals due to the customization of services before creating strategies for businesses’ needs before rates are determined.
6. Security and Privacy
When hiring an outsourced CFO, it is important to consider the security and privacy considerations involved. Some companies may not be as trustworthy as others, so it is important to do your research and find a reputable partner that has a proven track record of integrity. Additionally, you should make sure that the company you work with has clear policies in place regarding data protection and confidentiality of information.
On the other hand, some outsourced CFO services may offer more privacy than others depending on their policies and practices. For example, some companies may be able to provide more comprehensive financial insights without requiring their professionals to move within a commuting radius of your location.
It is also important to note that not all outsourced CFO services are created equal—some may be better equipped than others for certain tasks like payroll processing or tax compliance—so it’s important to do your research before making any decisions about which company you hire for these services.
7. Accessibility
Outsourced CFO services offer a cost-effective way to tap into the expertise of a CFO without having to hire one full-time. This allows small companies to save money while still getting access to valuable insights and strategies.
However, outsourced CFO services may not be suitable for every company due to accessibility considerations such as flexibility of engagement and availability of experts in certain areas of expertise. It is important for companies considering this option to evaluate their needs and make sure they have access to the right resources in order for it to be successful.
8. Time Management
Finding an outsourced CFO is essential for any startup founder who is struggling with time constraints. An outsourced CFO can help manage the big financial side of product development, customer relationships, capital raising, employees, and other business operations – giving you more time to focus on other important tasks.
It is important to ask about resource management support as well as experience in your line of work when searching for an outsourced CFO service. This way you can ensure that they are experienced in your industry and will save you time by taking on some of your responsibilities. Furthermore, setting specific goals or projects with them will allow for efficient use of resources while still meeting objectives set out by the startup founder(s).
