Common Responsibilities of Outsourced CFOs

Which outsourced CFO services can benefit your company? It depends on your goals. Unlike controllers and CPAs who typically have a more straightforward job description of record-keeping, bookkeeping, and tax management, an outsourced CFO’s role changes based on the current needs, challenges, or goals of an organization.

While there are a lot of things to take into account when looking for the best CFO services you can utilize, let's go over 11 main duties of an outsourced CFO and what to look for when hiring your next CFO firm like Preferred CFO.

11 Duties of an Outsourced CFO

Outsourced CFO companies provide as-needed, part-time or short-term CFO services to businesses. They're often brought in to help strengthen a company's financial strategy, address cash flow or unsustainable growth concerns, guide the business through audits and capital raises, and achieve long-term goals, such as preparing for a strategic exit or an IPO.

Preferred CFO has an elite team of some of the most experienced outsourced CFOs in the industry. These experts have decades of experience providing expert CFO services to hundreds of clients in dozens and industries.

Below is a list of some of the most common outsourced CFO services.

1. Financial Strategy

The greatest benefit a CFO will bring to your organization is a higher level of financial strategy. While most other finance roles in your organization involve maintaining past and present financial records, a CFO is focused on your organization's detailed short-term and long-term strategies. An outsourced CFO is an expert in long-term planning and figuring out what exactly is needed to take your company from where it is now to where you’d like to be.

2. Short and Long-Term Forecasting

A financial forecast is one of the most important tools an organization can have. It's the detailed financial and operational roadmap giving a step-by-step guide to take you from where you are now to achieve your goals. A financial forecast requires analysis, strategy, and practicality. It requires strategic understanding of the current and future capabilities of your company, mastery of financial algorithms and trends, as well as in-depth analysis of the competitive landscape within your industry.

3. Financial Systems Strategy & Design

If your financial software and internal systems can’t support your growth or connect effectively with your operational and sales processes, it may be time to reevaluate your technology. An outsourced CFO can assess your current systems, identify your evolving needs, and develop an integrated technology strategy. They can also recommend solutions, help evaluate and negotiate with providers, plan a phased implementation, and support your team through the transition so your new systems deliver lasting value.

4. Budgeting

While a forecast is typically a 5- or 10-year projection of costs and operations, a budget plans out in detail your projected financials. Even though this is a shorter timeframe than the strategic forecast, a budget is imperative to the day-to-day actions of an organization. This budget helps guide the year’s financial decisions while keeping the organization on track to reach its goals. A strategic CFO will often use a forecast as a rolling budget to help ensure your financial performance is in line with your company goals and roadmap.

5. Facilitating & Interpreting Financial Reporting

Finances are imperative to the daily operations of an organization, and financial reports keep you apprised of your current and future standings. Many outsourced CFO services include financial report facilitation, interpretation, and drill-down.

Let one of our Preferred CFO experts analyze your reports and give you the most important takeaways in a way that best supports your business needs. This gives you an opportunity to ask questions, re-strategize when needed, stay aware of the goings-on, and to have the information you need to make your essential business decisions.

If you don’t currently have a reliable system for timely, accurate financial reporting, your outsourced CFO will also help put a reporting system in place.

6. Raising Capital

Raising capital is typically very stressful for an organization, but an outsourced CFO can offer services to make the process go more smoothly. An outsourced CFO usually brings with him or her a network of financiers to whom they can introduce you. An outsourced CFO can also:

• Ensure your current accounting and financials are conducive to positive conversations with potential investors or lenders
• Term sheet review and negotiation
• Provide financial statements, reports, and documents for due diligence
• Assist in structuring capital, including determining how much financing you need and what combination of debt and equity financing is best for your goals
• Bring confidence, reputation, and professionalism to your organization by having an experienced CFO representing you and your business

7. Capital Structure

How much financing do you need? What combination of debt and equity will help you uphold company value while achieving the growth you desire? An outsourced CFO provides services to help you determine what capital structure is ideal for your organization.

An outsourced CFO can evaluate your cash flow, growth plans, risk tolerance, and existing financial obligations. With this information, they can help you choose a financing strategy that supports growth without creating unnecessary financial pressure.

8. Interim CFO Services

If your company is in transition, facing a challenge, or is in the process of hiring a full-time in-house CFO, an interim CFO can help support your organization in the meantime. Many companies also hire an outsourced CFO for an interim role preceding the need for a full-time CFO.

In these cases, an outsourced CFO can not only provide as-needed CFO strategy and services as your company grows, but can also help hire and orient a full-time CFO for your company.

9. Cash Flow Analysis & Restructuring

Cash flow is one of the most common and influential challenges businesses face. Solving cash flow issues involves more than just simply bringing in more revenue. It requires understanding what you’re spending and where you’re spending it, and knowing which expenses are essential for your organization’s growth and which can be let go or modified.

Outsourced CFOs take a deep dive into your financials to figure out how to maximize your bottom line. This may include:

• Renegotiating vendor contracts
• Restructuring client contracts
• Ensuring pricing is aligned with company & industry trends
• Analyzing commission structures
• Supply chain management
• Attributing costs to revenues

10. Making Cost Cuts

Outsourced CFOs can usually make more (and better) strategic cost cuts than an in-house team, which makes it one of the popular outsourced CFO services. The reason an outsourced CFO can be more effective is because:

1. They will have expansive experience with a variety of companies in your industry so they have a deep understanding of benchmarks to which they can compare your costs.
   
   
2. They are more objective. Where managers or teams may have more of an interest in particular projects or initiatives that may influence their cost-cutting strategy, outsourced CFOs have no such biases and make decisions based on data and experience.
   
   
3. Cost cuts will be more objective. Cost-cutting isn't simply a matter of deciding that "big numbers are bad and small numbers are good." Sustainable cost reduction requires thoughtful analysis, reliable data, and an objective approach. This helps ensure that cost-cutting efforts support the company's goals, rather than undermining them.

11. Facilitating Mergers & Acquisitions

CFO support can be valuable for a range of transactions, including mergers, acquisitions and partial, public, entity, or asset sales. Services may include:

• Preliminary analysis and reporting
• Forecasting
• Stabilizing financial functions
• Advising key team members during the sales process
• Preparing relevant documentation

Get the Financial Expertise Your Business Needs

Our outsourced CFOs provide strategic financial guidance to help businesses overcome challenges, improve profitability and pursue growth with confidence. From cash flow management and financial forecasting to systems optimization and strategic planning, we provide the expertise you need to make smarter financial decisions.

Contact us today to speak with one of our financial experts.