The first days of a business is an exciting time. You have an idea and a vision, and every move you make is the next step toward that goal. But without the right financial guidance, the first steps a business makes can also be timid, impulsive, or even foolish.
This blog will take a look at what a chief financial officer (CFO) does, what outsourced CFO services are, how to find an outsourced CFO for a startup, and how they benefit businesses and organizations.
To maintain your business, you have to control costs and manage cash flow. Most startup businesses follow a carefully crafted business plan, and business owners should have a plan for financial management from the very beginning. What does an outsourced CFO do?
Manage Cash Flow – Most businesses that fail point to cash flow issues will likely have problems succeeding. While there are other factors, cash flow issues add up to increase costs beyond what was initially expected. A CFO can optimize day-to-day cash flow and future-proof the business by assessing and addressing financial risk.
Accurate Reporting – To be useful, financial information must be timely, accurate, and understood. Financial reporting is more than a requirement—it is an important tool for making important financial decisions. The CFO is responsible for using accurate financial information to manage business performance.
Establishing Key Performance Indicators (KPI) – KPIs are how businesses evaluate success and profitability, and the outsourced CFO is a finance expert responsible for selecting them, gathering the data to measure them, and communicating them to key stakeholders.
Reduce Overall Risk – A CFO focuses on your finances, and their responsibilities mean reducing internal errors, improving the quality of financial information, and eliminating fraud. They use strategic planning, financial projections, and scenario modeling to mitigate risk.
Focus On the Goal – While entrepreneurs have to handle many things independently, nobody can be good at everything. One person can’t—and shouldn’t—handle all the marketing, financial, sales, and IT functions of a business. This approach is impractical and unsustainable, especially when outsourcing retains control and frees talent to handle growing the business.
Specialize Without Overhiring – A small business needs an oursourced CFO that has a wide range of expertise and can apply it to different business situations. This is difficult to find in a single person, and if found, the salary requirements and benefits needed to hire this person may be out of a small business’s reach. Outsourcing gives you a wealth of knowledge from a team of experts at a fraction of the cost of hiring a full time CFO. You immediately benefit from top talent.
Grow Faster – It’s difficult for a business to know when it’s time to scale up. New employees are expensive, and outsourcing allows you to scale up and stay flexible without long-term investments that may be unsustainable.
Control Budgets – Human resources are an unpredictable expense, but through outsourcing, you have a predictable monthly cost you can budget for.
Establish Your Brand – It’s easy to identify a new business when they are struggling with new processes and unproven technology. Outsourcied CFO services provide consistency, professionalism, and expertise from day one.
Stay Compliant – Several industries have strict regulations regarding operations and data security, and the consequences of not staying compliant can put a brand new company out of business quickly. Staying compliant requires experience and planning, something a professional outsourced CFO service is designed to provide.
When building a business, there are tons of moving parts, and when you have dozens of important decisions to make that will impact your business for years or decades, it’s easy to feel isolated. Hiring a startup CFO is an expensive solution, and if you hire the wrong person, your business can suffer for decades. CFO outsourcing with Rubino solves all of this.
Are you ready to get going? Reach out to us today to discuss the details of your business plan and how Rubino can drive your concept.