Founders don’t generally launch businesses because they enjoy financial forecasting. You started yours with a great new idea, or you were solving a problem you knew well. But somewhere between a handful of customers and a hundred, the figures became more complex cash flow was hard to understand your investor’s questions became more withering. And the idea of doing the finances later became a risk.

This is normally when the mind wanders to CFO Outsourced Services. The problem is, that investing in a full time CFO seems like a giant jump the salary alone can be anything up to high six figures, not to mention the bonuses, equity, and time finding the ‘right’ person. But for a growing business, this is a huge investment when what is really required is a high-level financial brain.

So, what exactly is an outsourced CFO?

Visualise it as a way of accessing the skill without actually buying the skill. An outsourced CFO is a professional finance director who can work with your business on a part time basis 1or2 days a month for example, a couple of days a week, or flexing up during a major event such as a fund raising or acquisition.

That’s very different from managing your accountant or bookkeeper. They keep the engine running: Within the engine, they make sure your transactions are up-to-date and filed properly, and you’re not breaking any rules.

An outsourced CFO takes care of the car’s journey: He makes forecasts, stress-test your growth ambitions, looks for risks before something breaks, and turns a cluttered spreadsheet into a story you can take to investors or a bank.

Why growing businesses are choosing this route

Essentially, the attractiveness boils down to three factors: price, adaptability, and expertise.

As to the price, the calculation is pretty simple. You avoid paying the full salary of a person and pay only the time that you really need. For instance, a growing startup that is constantly in need of a couple of days a month to keep its financial strategy in top shape would pay only a tiny fraction of the cost of a permanent chief financial officer.

Talking about adaptability, the fact is that your requirements change, Because of this why shouldn’t your finance leadership change as well? Some months are very slow and others are very intense and require a great deal of involvement – closing a fundraising, doing due diligence, handling a cash flow problem, etc. An outsourcing model changes plus you rather than setting you up with a fixed expense.

Finally, coming to expertise, it could be said that it is the least noticed factor. Since CFOs who work on outsourcing basis generally serve different businesses, they are capable of recognizing a wider range of situations than those who spend all their working life in a single company. They have seen what is successful, what results in disaster, and what investors really pay attention to. What you acquire is the ability to identify patterns that would take a very long time to develop internally.

Signs it might be time

Just log on! Not sure if you’re ready? A few common triggers tend to point in this direction:

• You’re seeking investment and require robust financials.
• Your bookkeeper or accountant is excellent at sorting things out in the past but is of very little use to help plan the future.
• Cash flow seems to be out of your control.
• You are making informed decisions based on ‘Instinct’. You are considering an exit and want everything (your numbers) and your valuations looking as good as they possibly can.
• You have matured rapidly and the financial controls haven’t.

If two or three of those rings a bell, always worth talking about. It’s more than about numbers One thing that often gets forgotten in the cost benefit analysis is what is missed.

It’s not just about the numbers

The best work as a sounding board, challenges your assumptions, forces you to ask the questions you’ve been avoiding, and allows you to feel confident in making difficult decisions.

I would suggest for a founder who has been bearing the financial burden solo, that partnership can make all the difference between having to guess and being able to know.

Mentoring and continuous support are the critical factors facilitating ongoing improvement in job performance. Your mentor is a finance leader who really cares about your growth and success even years down the road, not just someone who checks off a list of tasks, such a person will bring you a long-term and multi-faceted value which far exceeds a mere salary tick-off.

Trying to expand your company is complicated enough without also having to play the role of your own CFO as a side job. Hiring an external finance leader enables you to tap into high-level strategic skills and knowledge at the right time for you and at a price that is feasible for your current situation. It’s definitely not a lower-quality option – in fact, many rapidly developing businesses consider it the most reasonable and the most intelligent method.

Should you find your financial figures to be more of a burden than a means, it is necessary to get help from someone who is willing and able to share the load with you.