Hiring a CFO vs. Outsourcing an Interim CFO

As a business owner, you are faced with many choices.  If you’re in start-up mode, you are managing just about everything in your business, from bookkeeping to sales, from rainmaking to employee management and probably even a little HR thrown in just to keep things interesting.

As your business grows, you’ll probably ask yourself when, or if you need a CFO. The key factor, according to Forbes.com, is whether or not you’re getting the financial information you need to make important decisions without a CFO. There comes a time in your business when having someone on your team at the C-Level to oversee your company’s finances is a vital component to your success and growth.

Advantages of a Full-Time CFO

You can trust that this person’s first concern is the health of your company and that they’ll never be distracted by the needs of another client. Because their focus is entirely on you, they may be able to see the “big picture” more clearly.

Disadvantages of a Full-time CFO

Cost. The median annual CFO salary (as of April 27, 2019) was $371,548 – not factoring in the cost of healthcare and other benefits.

The alternative is to outsource your CFO services, which means hiring someone to work for your company in a CFO capacity for a certain number of hours per month or year, or on a project-related basis (such as for an audit).

Benefits of Hiring an Outsourced CFO

1.Less Expensive

A Interim or Contract CFO is less expensive than the salary of an in-house CFO with similar experience. An outsourced CFO doesn’t require benefits or bonuses. Where an in-house CFO will be a full-time salaried employee, outsourced CFO pricing will be based only on the amount of time/deliverables your organization needs.

2. Multiple Industry Experience

Interim CFOs have the unique experience of working with multiple industries at any given time. While the CFO organization you work with will pair you with a CFO who has significant experience in your specific industry, your CFO will also have experience in other industries as well. This provides an opportunity for multilayered insights and networks that you might not have otherwise had.

3. Pay For the Time You Need

When you have an outsourced CFO, you only pay for the time your business needs. This could be as little as just a few hours a month! The insight and expertise your business can gain at the exact time you need it is exactly what your small business needs to move forward.

4. Project Expertise

An outsourced Interim CFO also brings project expertise to address and resolve specific financial and operational challenges that arise.

5. Standardized Reporting and Formatting

While most CFOs, Controllers, and Bookkeepers bring some of their own preferences or style into how they format documents, files, or reports, an outsourced CFO is more likely to have adopted the most widely accepted best practices for generating and formulating client reports and deliverables.

6. They Can Handle Any Challenge You Throw at Them

When it comes to outsourced CFOs, they’ve “been there, done that,” for nearly any challenge you could throw at them. They’ve worked with organizations of all sizes, industries, stages of growth, and stages of disarray/emergency. If they haven’t faced a certain issue before, then you know one of the CFOs in the organization has and can bring a tried and true solution to the table.

7. There’s a Smaller Learning Curve

You’re probably aware of the general expectation that new employees will typically take 6-12 months to get up to speed and perform at their maximum capacity. With a virtual CFO, they have so much experience entering organizations mid-process that they always hit the floor running. Outsourced CFO services can very quickly assess the current situation and begin putting actions in place to resolve challenges and achieve goals.

Disadvantages of Outsourcing Your CFO

You may feel uncomfortable giving the intimate financial details to a CFO you view as transitory, or you might be worried that a better opportunity will come along and sweep your outsourced CFO away.

Both in-house CFOs and outsourced CFOs offer the skills you need to navigate the complicated waters of your company’s financial health. Outsourcing, however, is particularly useful for startups that can’t afford a full-time CFO or for companies with a one-off project that requires CFO-level expertise.

Other Times You Need an Interim CFO

An interim CFO may need to step in if your previous full-time CFO has left the organization or fallen ill. Most businesses that have a CFO cannot afford to be without one! You may also need an outsourced interim CFO in the event that your business is conducting a special product and need extra assistance. Whether you are filling a gap or need extra help, outsourced CFO services in Phoenix are the perfect solution for businesses!

Final Thoughts

There are always pros and cons to any executive hire, whether internal or outsourced.  One of the biggest advantages of hiring an interim CFO is that it gives you time.  Time to set up systems and test your financial methods.  Time to organize and vision for your company’s future.  And perhaps most importantly, the time you need to make the right long-term decision regarding your ideal CFO candidate. An outsourced CFO brings the financial leadership and solution expertise of a full-time CFO on an interim, rather than a permanent, basis.

Limitless Investment and Capital Outsourced CFO services in Phoenix

Limitless Investment & Capital’s outsourced CFOs are experienced professionals who offer expertise to business managers, including detailed insight into financials that allow you to make better business decisions; we also guide you through financial issues so you can spend time on growth instead of administration and overhead. By taking a proactive approach, together we can identify risks, evaluate options, and implement solutions at a cost that is well below the benefit. SCHEDULE A FREE CONSULTATION TODAY!