If you are weighing the benefits of an in-house CFO versus an outsourced CFO, you are probably becoming well-versed in many of the factors involved. You’re thinking through how each option will affect costs, accessibility to expertise and other variables.
But there may be a few advantages to an outsourced CFO that you haven’t thought about yet. Let’s dive in:
Unbiased Insights: When you have an in-house CFO, their advice may often mirror what an outsourced CFO would in many cases. But when it comes to determining where to cut costs or when a position may need to be cut, the outsourced CFO has the advantage.
That’s because an outsourced CFO doesn’t have the same element of bias coming into their recommendation. This helps you focus on the financial reasons behind a decision and move forward with confidence.
Identify Opportunities: When it’s time to secure a loan or find a new investor, an outsourced CFO may offer access to avenues you wouldn’t otherwise pursue. They have assisted other companies in securing funding and have networks of lenders and investors that may prove friendlier when you have a liaison assisting you.
It’s not limited to financial concerns, either. They have relationships with clients that may be valuable potential business partners for you in the future.
Focus: An in-house CFO serves as the key advisor to the CEO, which means they are going to get pulled into a lot of discussions. They can get bogged down in meetings, management and paperwork.
With an outsourced CFO, they are putting in focused time with your business. There are no meetings or paperwork competing with your financial reporting, tax planning or other critical tasks.
Tax and Bookkeeping: An in-house CFO isn’t necessarily a CPA, so you may pursue a path where you hire a CFO and then outsource your bookkeeping and tax filing processes.
When you use an outsourced CFO who is also a CPA, they can provide all of the functions of a CFO, while also helping you optimize your finances for tax planning. It’s one of the best ways to streamline your business while you avoid paying salary, benefits and onboarding costs for having a CFO, CPA and bookkeeper all on staff.
There are many benefits to an outsourced CFO. They can provide accurate financial reporting and give insights about new opportunities or cost reduction. But the advantages listed above are often ones that aren’t noticed until your decision is already made.
Ready to talk through your options? At The Power CFO, we offer fractional CFO services so you have access to the services you need, and nothing more. Contact us and let’s talk about where your business is headed!
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