3 Different Types of CFO Services For Small Businesses

As businesses grow, their financials become more complex. As financials become more complex, it becomes more difficult to measure and manage cash flow, inventory, production costs, payroll, and other critical financial information and tasks.

This is why many companies grow themselves right out of business. They’re unable to maintain the financial controls and systems required to operate effectively and efficiently. As a result, they make business decisions based on inaccurate, incomplete and/or outdated information.

If you see your financials becoming difficult to manage but you’re not ready to hire a full-time chief financial officer (CFO), outsourced CFO services may be the perfect option.

Interim CFO

An Interim CFOs are finance experts who come in, usually on a full-time basis, typically for one to three months, to help steer a company through a financial crisis, operations change, preparation for a sale, or the gap between one CFO’s departure and the hiring of a new one. An accomplished interim CFO’s expertise guarantees that strategic initiatives get done and that growth opportunities are acted upon incompetent and timely ways.

An interim CFO doesn’t typically deal with startups. It’s more likely to be middle-market companies who call on folks like me to come in on a full-time basis for a very short, defined period of time. Usually, there is a catalyst, something undesirable happening to the firm’s financial health. Companies generally don’t bring in an interim CFO when things are going well.

Virtual CFO

A virtual CFO is a person who performs the services of a CFO, or chief financial officer; however, instead of providing those services in person, as a full-time employee, virtual CFO services does so remotely, typically on a less-than-full-time schedule.

Here are just a few of the services a virtual CFO might provide:

  • Financial planning, like cash flow forecasting
  • Financial reporting
  • Financial risk management
  • Cost management
  • Debt reduction

Additionally, A virtual CFO can ensure a seamless transition between CFOs. If your CFO is retiring or pursuing another opportunity, or you’re planning to make a change, a virtual CFO can get up to speed on your financial systems and process and assume the responsibilities of your CFO on an interim basis until the new CFO has been hired and on-boarded. A virtual CFO can even help you review applications and resumes so you hire the right person.

Part-time CFO

A part-time CFO immediately can help focus on key financial elements rather than get lost in the day-to-day operational details of the business. Part-time CFOs are cost-effective and offer an outside perspective that delivers invaluable input and insight into strategic decisions. When growing businesses may not yet want to budget for the salary and fully-loaded overhead of a first full-time CFO, a part-time CFO is an attractive and cost-effective option.

When Your Small Business Should Hire Outsourced CFO Services

There are some distinct indications that it might be time to consider a CFO role for your company. If timely and accurate financial results needed to make business decisions are consistently delayed or inaccurate, it is time to add additional bandwidth to the department. This can often be caused by rapid growth or the number and complexity of transactions increase. Lenders, investors, customers, and vendors may request detailed and specialized reporting, or when the engaged CPA firm may be requiring additional schedules and data. If the company is preparing for some type of exit, succession or transaction, having the CFO resource available to assist and guide the due diligence activity can ensure a timely and accurate process.

The Bottom Line

Accurate and timely financial information – along with practical interpretation and guidance on how best to leverage it – is invaluable in driving strategy formulation and evolution. Without it, you’re shooting from the hip. A high-caliber CFO professional is well-equipped to communicate with investors, attorneys, and other professionals – and experienced in negotiating favorable contracts with vendors, investors, and other partners.

The goals of hiring the CFO function can usually be summarized by quantifying and reducing risk to the organization, lowering costs to increase profitability and cash flow, and ensure that the long term company strategy is executed and results realized. By utilizing outsourced CFO services, business owners and managers can realize these benefits at an earlier stage and more cost-effectively than waiting for a full-time CFO role to develop.

Limitless Investment & Capital Outsourced CFO Services in Denver and Tampa

If you see your company with financial issues, you know it’s time to take action to get your financial house in order. You not only won’t be able to grow your company without addressing these issues, but you could actually slide backward and ultimately fail as a business. Let’s set up a consultation to learn about your specific business needs and can discuss the best-outsourced CFO services for you!

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