The position of Financial Director often referred to as the CFO, plays an important role in business, with the responsibility of correctly interpreting, planning, analyzing, and implementing financial goals.
The probability of implementing a business idea is much higher when the expected financial benefits are properly calculated and evaluated. It is also necessary for the day-to-day operations to evaluate the financial results of business development decisions, which are the functions of the CFO.
The role of the CFO includes budgeting, cash control, accounting control, financial reporting analysis, assisting managers in sharing and understanding financial results, forecasting the financial results of strategic goals, and financial control over the implementation of those goals.
Over time, the position of the CFO has refined and acquired more functions, becoming more tailored and flexible for business operations. With the growth of the role of the CFO, the so-called CFO Outsource emerged.
CFO Outsource is a financial expert (either one person or a team) who provides companies with all kinds of financial services over a period of time.
CFO Outsource is mostly applied to companies that want to use their internal resources only for operations and hand over other administrative directions to a competent team. For similar types of companies, it is more convenient to find a financial manager or team of managers outsourced that combines industry expertise. As the development of a manager or team with the same qualifications full-time within the company is often associated with greater financial resources.
The role of CFO Outsource in the company is as follows:
- Track and periodically update the company’s financial performance
- Support in budgeting
- Compile and share financial forecasts
- Review the company KPI and adjust if necessary
- Outline future growth plans
- Evaluate and review financial statements, identify gaps in financial accounting and find effective ways to address them
- Prepare company accounting policies and compile internal documents
- Make recommendations to improve the financial situation
- Financial modeling in terms of projects: evaluation of investment feasibility, analyze alternative scenarios of project development, and sensitivity analysis
- Support in developing an optimal funding structure.
CFO Outsource also effectively helps the company attract additional funding, raise capital, liaise with banks and other sources of funding. Using CFO Outsource typically reduces not only the financial costs associated with finding additional capital, but also the costs associated with time resources.
The main advantages that CFO Outsource has are lower costs, increased availability, and more flexibility and mobilization of more expertise. In addition, since CFO Outsources are not involved in the day-to-day operations of the company, they have the ability to re-examine the company figures and objectively assess their financial condition.
In order to use the CFO Outsource service and all the benefits that come with this option, you need to pay attention to the following issues:
- Your Goals – CFO service providers typically offer a variety of services, but in order for collaboration to be effective, determine in advance the problems the company is facing and the results you want to achieve. Knowing your goals will help you know what you are looking for in a service company.
- Relevant experience – Companies in the markets may have different measurements of priorities and different planning challenges. Give preference to CFOs who have experience working with companies of your type. Also, pay attention to the team that is intended to provide CFO services. A team of several people with different experiences is always more effective at risk management than one individual. And most importantly, this way you will have access to highly competent services compared to performing CFO functions with internal resources.