Chief finance officers (CFOs) are responsible for the company’s financial health. Managing the accounting team, balancing revenues and expenses, financial and data analysis, financial planning, budgeting, and sourcing for funding are the top tasks of a CFO.
Resourceful as they are, round-the-clock CFOs only make sense if they work for an established company. Startups and upcoming entities may want to outsource fractional CFOs to help reduce the financial burden. So, if you want to work with a chief finance officer, here’s why you should opt for a fractional one.
Hourly Rate Remuneration
Employee payments are some of the most demanding activities in any company. Organizational heads must ensure their people are paid well and on time to avoid altercations. CFOs hold the highest rank in the accounting chain, so they are paid a hefty amount for their services.
Hiring a fractional CFO reduces your monthly bill when it comes to employees. You’ll only pay them for hours they camp at your office unraveling hidden intel. You’re not tied to paying them employee benefits like 420K, health insurance, or increasing the wage yearly as the law requires. In the long run, you end up slashing the bill by more than 50% if you do your math right.
Better Decision Making
A company’s financials play a significant role in decision-making. Stakeholders have to know what they are working with before making moves. If a business is struggling, finding funding is one of the primary steps the entity should focus on.
Outsourcing a CFO makes it easy to identify what aspects of the company need backing up and provide intel on what to avoid, what to put on hold, and what to take immediate action on.
Improved Financial Controls
Any company, whether great or small, must have a streamlined finance department. This team is responsible for curating financial statements, controlling the company’s assets, avoiding tax evasion, paying employees, and minimizing the risk of money laundering.
When dealing with regular financial controllers, the company may need additional help to leverage its reach on all these aspects. It may have to find someone with a higher education grade to tackle issues a regular accountant doesn’t have clearance over. Outsourcing a finance CFO is a seamless way of ensuring your financials are in check.
Expertise in Future Planning
Any company needs to plan for the future. A fractional cfo for business startups that are growing rapidly plays a significant role in ascertaining that you have the correct information to help you make any money-related move.
Their ability to forecast the company’s future depending on its current state is also unmatched, making it mandatory to have one on your side. A resourceful chief finance officer helps the company plan and provide finances with the help of internal and external reports and intel to help make smooth strategies that won’t fail.
Special Industry Skillset
The upside of having a CFO in your corner is the availability of innumerable intel for any particular industry. CFOs are known to have plenty of years of experience in the accounts industry, making them the perfect option for anyone looking to level improve a company for the future.
Not only will the entity receive gold in the form of an industry-specific skillset, but it will also benefit from the experience, especially the mastery of tax laws and regulations, both new and old. This information comes in handy when the company is benchmarking against the competition.
Avoiding Fund Misappropriation
Finance officers are tasked with watching out for the most harmful practices in the company that are directly linked to lawsuits. Tax evasion and fund misappropriation are why company owners and employees may face prosecution once the IRS gets wind of such activities.
Through data analysis, the finance officer can effortlessly detect if anyone is laundering money or using funds for the wrong purpose. In the long run, avoiding fund misappropriation saves the company millions of dollars, considering that you won’t be forced to take up loans or pay fines resulting from this vice.
Time Saving
CFOs are expected to understand company finance in ways regular finance controllers can’t. It means they may not struggle as much to pinpoint where the problem is. This means a quicker resolution of issues allowing company stakeholders to focus their resources on expanding and growing the company.
Most importantly, it frees other accounting team members to work on daily finance activities and avoid work backlog.
Wrap Up
Inevitably a fractional CFO is a brilliant acquisition for any company. The fact that they outsource their services to companies on demand allows them to brush shoulders with multiple businesses, making them the perfect persons to work with to solve a myriad of financial problems in your company, especially money-saving.