Your internal accounting function must expand with your enterprise, but which comes first? Growth or more staff? This article explains the function of a Chief Financial Officer (CFO) and how this professional can support your growth at the right time. Find out if you just need a larger outsourced accounting function or if you really need a CFO.
What Does a CFO Do?
A CFO uses his or her knowledge and experience to influence the financial decisions of a company to fulfill the company’s goals, mission and vision. CFOs work hard to drive the growth of the business by building process clarity across departments and helping them prepare to manage a larger entity.
Here are the high-level projects a CFO might cover:
- Risk management
- Budgeting
- Compensation planning
- Financial planning
- Executive coaching
- Financial analysis
- Cash flow forecasting
- Controllership
- Monthly and year-end closing
- Audit support
Outsourced CFO Services
Working with an outsourced CFO has its perks. For one thing, you will only pay for CFO services as you need them. Your outsourced advisory team is on-call to focus on the task-at-hand without getting caught in the weeds on a side project. Because of this focus, your outsourced arrangement can be more cost effective and scalable with your growth. Unlike a full-time staff CFO, you are not paying for benefits, variable compensation or payroll taxes.
In-house CFO
However, having an in-house CFO can be beneficial for the following reasons.
Your in-house CFO can take on operational initiatives beyond finance that may delve into staffing, board or investor relations and strategic planning. As this professional works closely with managers and leaders in-house, there are certain synergies that can help you align financial processes with operational needs.
Outsourced vs. In-house CFO
This by no means encapsulates all of the differences between utilizing outsourced CFO services or hiring your CFO in-house, but here are a few key points.
| Outsourced CFO Services | In-house CFO |
Cost determined by retainer or project scope | Full-time salary and benefits |
| Focused on one goal or set of goals | May have multiple responsibilities for the organization and stakeholders |
| Brings past experience and knowledge of other projects/industries to the client | Gets to know the business inside and out |
| Multiple viewpoints from a team of advisors | Individual knowledge and experience applied in-house |
| Prioritizes time by different client needs | Time is dedicated 100% to one organization |
| Outsourced project management can free up time and energy for in-house staff | Delegates to the in-house accounting team |
Expanding Your Outsourced Accounting Function
If you can’t quite justify an in-house CFO, but you need more than simple bookkeeping, you may consider outsourced accounting services as an interim growth solution. Outsourced accountants through a CPA firm can handle cash flow monitoring, maintain your chart of accounts and perform all of your bookkeeping and accounting services along with tax planning and reporting needs.
Ultimately, it’s up to you and your team to determine whether you need to outsource CFO services, hire an in-house CFO or simply expand your finance function through outsourced accounting services.
If you need help determining what works for you right now, send us a message. We are always here to help you determine the best path to your success.
Learn more about WhippleWood’s Outsourced CFO Services.