Hire A Outsourced CFO

What Is an Outsourced Chief Financial Officer?

 

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A chief financial officer (CFO) is a senior manager responsible for managing a company’s finances. This includes financial planning, management of financial risks, record-keeping, and financial reporting.

They also typically supervise the finance unit of a business and they serve as the chief financial spokesperson for an organization. They can also assist chief operating officers on all business matters relating to budget management, cost-benefit analysis, forecasting needs, and securing new funding.

An Outsourced CFO, on the other hand, fulfill the same strategic role on a part-time or contractual basis. They are now full-time employees and instead work as an independent contractor and they have experience working with a number of private and public companies.

Much like a regular CFO, they oversee an organization’s financial activities and serve in a strategic advisory role for the CEO and other C-suite peers.

They are responsible for maintaining a company’s liquidity, ensuring a strong return on investment, forecasting to create profit projections for the CEO and shareholders, and making certain that all financial reports including balance sheets and P&L and cash flow statements are accurate and complete.

Depending on the size of company they’re working for, a remote CFO can perform key duties including:

• Running day-to-day accounting and financial operations as a controller
• Acting as a treasurer and being responsible for liquidity, debt, and assets
• Heading corporate financial planning and financial analysis teams

Outsourced CFOs can provide these financial services for any length of time. They can also work in a firm in your city or they can also be in a different state or country entirely.

Why Should You Outsource a CFO?

All businesses, regardless of size, can benefit from the highly organized, critical, and accurate financial information that CFOs can bring to the table. However, while bigger and more established businesses have the capacity to onboard a full-time CFO, start-ups and smaller companies don’t always have the capacity and budget for it.

Outsourced CFO services are an affordable and convenient way for smaller firms to have access to financial experts whenever they need them without needing to hire someone full-time. They can be hired on an as-needed, short-term, or part-time basis.

Business owners may want to hire an outsourced CFO to:

Save on Costs

Hiring a full-time CFO can be a significant burden for smaller companies with fewer resources. On the other hand, onboarding a remote CFO can be less expensive since you won’t need to pay employee benefits, commissions, bonuses, government-mandated insurances, or even profit-sharing incentives.

Focus on Your Core Business

An outsourced CFO can take care of activities like budgeting, analyzing financial data, forecasting, and developing strategies so you can focus on your business operations.

Make Better Business Decisions

A CFO can help small and mid-sized companies to make sense of the financial aspect of running a business and understand financial reports so they can make strategic business decisions anchored in facts and data that reflect your financial position

Improve Business Performance

Your company’s financial position affects various aspects of its performance. Hiring a remote CFO can bring a fresh perspective so you can understand why your brand may be underperforming and develop a strategy to overcome this.

Boost Internal Control

While a freelance CFO may not be a full-time hire for you, they can still implement internal control procedures that will help prevent protect your company’s assets and resources.

What Skills Does An Outsourced CFO have?

The qualifications to hire a CFO may differ from company to company but there are standard skills that all CFOs have that allow them to fulfill their role effectively. This includes:

Problem Solving

A big part of a CFO’s role is finding solutions to problems and making decisions that can lead a company in the right direction. CFOs need to have good problem-solving skills that will allow them to create a strategic plan that ensures growth and success for a company.

Leadership

CFOs are forward-looking individuals that work toward the bigger picture. Their role goes beyond financial reporting, conducting audits, and ensuring compliance.

They also need to manage relationships with stakeholders and make crucial decisions while balancing financial management. To this end, they need to have strong leadership skills that are aligned with a company’s goals, business model, and vision to lead it towards growth.

Analytical Skills

An outsourced CFO leverages business analytics to enhance a company’s operational value. This feeds into aspects of the business including procurement, business units, IT infrastructure, sales and marketing, inventory management, and supply chain and logistics.

Risk Assessment

CFOs are excellent at predicting, managing, and mitigating risk. They can identify potential threats and work towards preventing them.

Innovation Management

Remote CFOs understand the value of technology in accelerating a company’s growth and scalability. By managing innovation, they can help leverage all possible resources, cultivate a creative environment, enhance your talent recruitment strategy, and introduce modern and automated solutions to improve productivity and efficiency.

How Much Does An Outsourced CFO Get Paid?

Salary ranges for outsourced CFOs can vary based on location, education and experience, and to a certain extent, the budget of the company that’s hiring them.

Typically, they work part-time or on a contractual basis and charge a retainer fee for their services. In some cases, remote CFOs may also get paid for working on individual projects such as cash flow forecasting.

Since freelance CFO rates are independent contractors, rates may also be affected by a number of factors including:

• The complexity of your business. CFOs may charge higher or lower depending on aspects of your business including how many products you sell and how you sell them, if you have multiple business partners, the number of bank accounts your business has, and how many lines of credit you’re paying down.
• The cleanliness of your existing accounting. If your current financial reports are easy to read, a CFO can become more efficient in their analysis which can lower their rate.
• How often do you want to meet with the CFO? More meetings with an outsourced CFO can drive their rates up.
• The services you need.  Do you need a CFO to simply handle your general ledger and daily financials or do you need them to take care of payroll, bills payment, in-depth reporting, planning, and strategy? The more tasks a CFO will do for you, the higher their rate will be.

On average, outsourced CFOs make:

• $175 to $300 on an hourly basis
• $1,200 to $1,500 on a daily basis
• $3,000 to $10,000 on a monthly basis

You can learn more on FreeUp’s Pricing Guide!

Where Can Remote CFOs be Located?

• Philippines
• USA
• Canada
• Australia

What CFOs Can Help With:

• Manage finances
• Track cash flow
• Create projections
• Draft financial statements
• Update accounting software
• Process accounts receivable
• Send invoices
• Bookkeeping
• Prepare tax returns

Hourly vs. Fixed Rate Outsourced CFO

Outsourced CFOs typically charge either by the hour or for a flat monthly fee.

Hourly outsourced CFOs charge their customers an hourly rate for their services.

This means you’re paying for their time instead of the completion of a specific objective. This is preferable if you need a CFO for a few hours a month for ad hoc projects. You can also pay hourly if your preferred outcome is still unclear.

Under this pricing model, CFOs typically base it on their desired annual salary plus their yearly operational expenses. They then divide that figure by the number of billable hours their work.

Here, an accurate time-tracking tool is essential. The good news is that if you hire an outsourced CFO through FreeUp, they can use the dashboard to accurately. They can track their working hours and clients will be billed correctly.

On the other hand, fixed-rate outsourced CFOs charge a flat monthly fee for either a set scope of work or for a specific number of working hours each month.

Under this pricing model, the rate may go up and down depending on the specific services you need or the size of a client’s business. This is determined based on internal metrics or industry standards.

Typically, services are bundled together into different service and pricing levels so clients can choose what works for their needs.

This can be billed before or after the services have been rendered. It can also be a one-time or a recurring fee depending on the client’s needs.