Almost all larger, well-established businesses employ a full time Chief Financial Officer (CFO).
A CFO is a formally qualified professional that is responsible for the financial health of the business and assists the business owner and leadership team to make informed financial, operational and strategic decisions to improve every facet of the business.
The CFO’s responsibilities include, but aren’t limited to, building a top-notch finance and accounting team, ensuring revenues and expenses stay in balance, overseeing financial management and performance analysis functions, obtaining external funding, overseeing working capital and cash flow requirements, working with business managers and shareholders to analyse financial data, preparing budgets & forecasts, undertaking due diligence on mergers and acquisitions and making operational and strategic recommendations to optimise the business.
The most-valued CFOs are visionaries — they are key strategic & trusted business advisors because they have an eye toward the future and innovation and proactively work closely with business owners to achieve their business goals and objectives. They can be (but needn’t be) a member of your board of directors.
The CFO Is responsible for –
- Increasing Profit
- Improving Cash Flow
- Strategic Business Planning & Implementation
- Financial Management
- Business mentoring and assisting decision making
- Due Diligence prior to Mergers and Acquisitions
- Building and training the internal accounting team (including temporary placements)
- Monitoring and Improving Business Performance
- Feasibility Studies and Financial Modelling to facilitate informed decision making
- Business Exit Strategies & Planning (including building business value and preparation for sale of business)
- Executive coaching & mentoring in financial matters
- Business Turnaround Strategies & Change Management
An Outsourced CFO – sometimes called a Virtual CFO or Part-time CFO – is a formally qualified, experienced operational & financial professional who performs the same services and undertakes the same responsibilities as a traditional full time CFO. However, rather than being employed full time, the Outsourced CFO works part time on a contractual basis for several businesses to deliver the services, as and when required by those businesses. An Outsourced CFO either works remotely (on-line) or by attending the business’ offices (or a combination of both).
In terms of the services that they provide and the benefits that they deliver to businesses that employ or engage them, there are no differences.
Full-time and Outsourced CFOs play an integral role in ensuring the profitability of businesses by providing high level financial management input into operational and strategic matters. As such they are both considered to be part of a business’ management and leadership team.
Full-time and Outsourced CFOs are all formally qualified andexperienced professionals (or should be). Outsourced CFOs are normally CFOs who no longer want to be employed full-time by one organisation as they enjoy the challenge of working concurrently with different businesses on a part time contract basis.
There are only 2 main differences between a Full-time CFO and an Outsourced CFO. They are the terms of employment/engagement and the amount of time spent with a business.
Full-time CFOs are employed (i.e., on the payroll) and work full time for one organisation. Whereas Outsourced CFOs, rather than being employed full time, are engaged part time on a contract basis by several businesses to deliver services as and when required by those businesses.
Outsourced CFOs can either work remotely (on-line) or by attending the business’ offices (or by a combination of both).
Almost all large, well-established businesses employ a CFO. Large successful businesses understand why they need a CFO, there is enough work to keep them busy full-time and they can afford to employ a full time CFO.
But what about less-established Small and Medium-sized Enterprises (SMEs)? Can they also access CFO-level advice without paying a full-time executive salary? And is there enough work to keep a full-time CFO busy?
SMEs know that if the ‘best’ businesses do something to succeed, then they should do it too. After all, it’s a logical and proven formula. However, in our experience, SMEs struggle to address the issue of accessing experienced finance professionals (CFOs) on a SME business budget. Furthermore, most SMEs do not have enough work to engage a CFO full time – even if they could afford it.
The answer for SMEs is to engage an Outsourced CFO that will provide the same high level Financial Input to the business (as a Full-time CFO) but, on a flexible, as needed basis that is very cost effective.
Cost Effectiveness:
Most SMEs don’t have enough work for a full time CFO. Therefore, for an SME to employ a Full-time CFO is an unnecessary expense on the payroll. Outsourced CFOs are far more cost effective because SMEs only pay them for the part time work that they undertake.
Flexibility:
SMEs engage Outsourced CFOs when they need them and for as long as you need them (either on a ‘part time retainer’ basis or for ‘once off project’ basis). There is no locked in contracts, no payroll costs or employee benefits to be paid.
Business Experience:
An experienced and professional Outsourced CFO will have worked with many companies in different industries which will have given them broad (outside the box) experience in problem solving and resolving the many typical financial challenges that SMEs encounter.
Objectivity:
An Outsourced CFO will be an impartial and unbiased external advisor capable of giving proposed solutions and advice that is free of any emotional ties with business owners, the business or team members. Outsourced CFOs have no hidden agendas. Their only objective is to offer the best possible service and advice to SMEs and business owners because that is what gives them a buzz and keeps them engaged.
Focus:
With your business’ financial function being professionally managed by a professional Outsourced CFO you will be able to fully focus on your core competencies without distraction and that will, inevitably, further improve your business.
There are 4 main reasons for engaging an Outsourced CFO.
The Outsourced CFO can:
- Provide CFO services on a ‘part time retainer’ basis that may include any (or all) of the following responsibilities –
- Increasing Profit
- Improving Cash Flow
- Strategic Business Planning & Implementation
- Overseeing the full Financial Management function of the business
- Business mentoring and assisting decision making
- Building and training the internal accounting team (including sourcing temporary placements)
- Monitoring and Improving Business Performance
- The Financial Reporting & Measurement Systems that drive the business
- Provide CFO services on a ‘once off project’ basis for.
- Due Diligence processes/procedures prior to a contemplated Merger, Acquisition or other large transactions
- Feasibility Studies and Financial Modelling to facilitate informed decision making
- Business Exit Strategies & Planning
- Raising external Capital & negotiating Bank Credit facilities
- Reviewing, developing and improving systems & procedures
- Temporarily replace a Full-time CFO while they are on leave or a sabbatical
- Be a board member and trusted Strategic & Operational business advisor
If your business is not receiving high level financial input from a CFO the cost to your business is probably enormous in terms of:
- Lost opportunity costs
- Reduced Profit
- Cash Flow that isn’t optimised
- Lack of Strategic direction with clearly defined goals and objectives
- Decision making that is often based on ‘gut feel’ rather than quantifiable costs and benefits
- Ineffective systems & processes
A professional and skilled Outsourced CFO will, in all probability, MORE THAN pay for themselves in terms of.
- Increased Profits
- Improved cash Flow
- Strategic Business Planning & Implementation
- Enhanced Financial Management function
- Business mentoring and decision making
In summary, smart and successful businesses now view the CFO role as an INVESTMENT in the profitability and sustainability of the business rather than a cost.
- Your financial results are always late, and you don’t know whether you can rely on them to give you the full picture.
- You don’t fully understand the financial results
- The business is not as profitable as it should be given the effort and money you have put into it
- The business frequently has cash flow problems and battles to make all payments on time
- The business is growing, all resources are stretched, and you feel that you are losing control.
- The business seldom or never seems to have enough cash or working capital
- You are stressed and tired and always seems to be in ‘crisis mode’ and fighting daily fires.
- The business has recently grown in size and complexity, but you haven’t brought in additional financial management skills to assist business management & improve decision making
- You are not skilled or interested in Financial Management & Administration
- You don’t have a Strategic Business Plan
- Your operating costs are creeping up and your business needs more working capital, but you don’t know what to do about either
- You don’t know whether your inhouse accounting staff/team are efficient or not.
- You don’t seem to be able to concentrate on your core competencies, or maybe you don’t know what they are?
- Accounting & Administration is Not Your Thing
- Your knowledge of bookkeeping, accounting, compliance and budgeting are limited
Yes definitely!
Being a Business Owner is a lonely & stressful place. You probably need a sounding board for the business challenges you’re confronting and decisions that you must make.
However, most of your employees/team members either lack the necessary business experience and acumen to be of assistance OR they have their own agenda and will tell what they think you wants to hear rather than what you need to hear. In these situations, an outsourced CFO can play an invaluable role as an experienced, skilled, unbiased and independent business mentor/advisor. They can help business owners by talking through and analysing business challenges & alternative solutions and assist business owners to make the best possible decisions for their business (and themselves)
Your External Accountant and Registered Tax Agent prepare your Annual Financial Statements and take care of all your tax compliance matters (Annual Income tax Returns, BAS and Activity Statement lodgements etc.)
Your External Accountant and Registered tax Agent play an important role in ensuring that your business doesn’t run fowl of the ATO or other regulatory bodies and, if you do engage an Outsourced CFO, you will still need your External Accountant and Registered Tax Agent.
External Accountants and Tax Agents deal mainly with historical results in dealing with tax and other compliance matters. Whereas Outsourced CFO’s focus mainly on improving your business by have an eye toward the future and proactively working with business owners to formulate and achieve their business and personal goals and objectives.
An Outsourced CFO will provide high level Financial Management input into your business and provide many Operational and Strategic benefits to you and your business as set out elsewhere in the FAQs. For example, see.
Yes definitely!
Every business is different. Even businesses that offer the same products & services in the same city/suburb are different. That’s because every business has its own character, culture, unique challenges and areas that need improvement.
In addition, all business owners are different. They have different goals, aspirations and work/life balance requirements.
Therefore, we don’t offer a ‘one size fits all’ solution.
We provide Outsourced CFO packages & solutions tailored specifically to your business and personal requirements and budget.
We offer a complimentary, ‘no strings attached’ 45-minute Zoom consultation to discuss how we can improve your business and tailor a solution that suites you best.
Outsourced CFOs, like their full-time counterparts, should be formally qualified and be a member of a national professional accounting body (such as CA ANZ, CPA, IPA etc.). They should be able to provide you with proof of formal professional qualifications and references & testimonials.
In addition, you’re a smart business owner. Talk to a few Outsourced CFOs and ask them specific questions about the difficulties you are having in your business.
Ask them how they would tackle the business challenges and assist you to resolve them. It won’t be difficult for you to differentiate between genuinely experienced and professional Outsourced CFOs vs those who lack formal qualifications and/or relevant business experience and are responding to your questions by reference to a generic script. Start by calling us and you’ll experience feedback and input from an experienced and professional Outsourced CFO.
We offer a complimentary, no strings attached, 45-minute Zoom consultation to discuss how we can improve your business and tailor a solution that best suites you. We provide Outsourced CFO packages & solutions tailored specifically to your requirements and budget.
TAKE ACTION NOW to discuss how we may be of service to you
by booking an initial 15-minute phone call via the ‘Please Book . . ’ link (below) during which we’ll discuss your business challenges and set up the complimentary, and obligation free, 45-minute Zoom consultation with one of our Outsourced CFOs.
OUR PROMISE:
During the 45-minute complimentary Zoom consultation, our CFO will provide you with, at least, 3 relevant ‘Quick Wins’ that you and your team can immediately work on to improve your business – whether you choose to work with us or not.
DON’T DELAY. Do it now
You have nothing to lose and everything to gain!
Time is of the essence, because in today’s business environment, if you’re not going forwards, you’re going backwards.