Are Outsourced CFO Services Best for Your Business?

In-house or outsourced? That is the question. Entrusting your company’s finances to outsourced CFO services can help you cut costs, save time, and focus on core business operations—but it’s not for everyone. Explore what a CFO really does, and take a peek into the benefits and pitfalls of keeping those duties under your own roof or trusting an external partner.

What a CFO Does

Chief financial officers (CFOs) aren’t just run-of-the-mill accountants. Beyond managing the books or assisting with financial reporting, a good CFO looks at the bigger picture to make your organization more valuable to shareholders and increase returns. 

In that same vein, CFO services usually include:

• Break-even analysis
• Budget-to-actual reporting
• Cash flow forecasting and management
• Debt planning and reduction
• Labor cost management
• Variable versus fixed expense reporting

But which is your best fit: in-house or outsourced CFO services? Let’s take a look.

Benefits of Hiring an In-House CFO

Sometimes keeping your CFO in-house just makes more sense because of how your business operates. In-house financial pros have the best access to help your business thrive, especially when your organization is paper-heavy or inventory-dependent. 

Paper-Heavy or Low-Tech Businesses

Do you rely on manual processes or manage significant paperwork? Companies that need to keep tabs on receipts, bills, time tracking slips, and more usually benefit from having access to and expertise from an in-house CFO. That’s because these professionals know the ins and outs of the day-to-day business.

Inventory-Dependent Businesses

Keeping track of product inventory? Businesses that actively sell products need in-house accountants because outsourced CFO services just don’t have the same level of access, so they’re unable to observe and make note of inventory issues as they arise. 

Keeping your CFO in-house comes with a number of operational benefits, including the freedom to:

• Build out the internal team.

• Control the CFO’s time, resources, and results.

• Develop reporting procedures, monitor progress, and adjust.

But there are also a few limitations to keeping your financial activities under your own roof because:

• Internal team members may need time to develop skills or expertise.

• Devoting time and resources to finances diverts attention from core business.

Sound like the right fit? Time to get your team assembled! If not, outsourced CFO services may be a better bet.

Benefits of Trusting an Outsourced CFO

There’s a tush for every seat, and professional service businesses fit nicely in an outsourced CFO services “chair.” Joking aside, businesses that are both tech-savvy and heartbeat-oriented succeed with external partners by their side.

Tech-Savvy Businesses 

Does your company rely heavily on tech tools for daily operations? Maybe you’re even remote, like us! Being comfortable with apps and digital tools comes in handy with outsourced CFO services because they facilitate real-time communication with your financial pros. 

‘Heartbeat’-Oriented Businesses

Are you cool with running on a “heartbeat”—or calendered cadence of activities—from when your bills get paid to when reports come out? Businesses that don’t need their CFO on speed dial 24/7 but can trust that their finances are handled on a regular schedule succeed with outsourced CFO services.

You can get major gains from partnering with an outsourced CFO services provider, helping your company to:

• Save money on salaries and benefits.

• Avoid long-term commitments by hiring for a defined period.

• Unlock operational efficiencies and skills in customer service, marketing, and so on.

But every rose has its thorn, so you could still face a few hiccups on the road to outsourcing your CFO services:

• It may take time to find a quality provider that fits your budget.

• Outsourced CFO services providers are busy bees.

Expect the Best from Outsourced CFO Services

To determine whether in-house or outsourced CFO services are the right fit for your business, sit back and think about how your company functions, its needs, and your budget. Businesses with up to $20 million in revenue often succeed with an outsourced partnership because it provides the right balance of control and flexibility. 

Ignite Spot has served hundreds of companies from right here in the U.S., so you always know your team is available, accessible, and knowledgeable about local accounting practices. 

We’re here to help you:

• Plan your future.

• Monitor business performance.

• Control the storm.

• Build your team.

• Grow your wealth.

• Manage debt.

Download our guide, Should I Outsource My Accounting Services? [With Checklist], for more insights into whether an outsourced CFO partnership is the right fit, and get in touch to learn how Ignite Spot can help you manage your finances.