Small to medium size business face a unique situation. They are growing and expanding, requiring more staff. However, they still tend to run tight budgets and may not be able to employee everyone necessary. For example executives within an organization can vary depending on size. The CEO is a certainty, but beyond that you may only find one or two c-suite people.
Regardless of size, it is important to have financial direction. Someone should be responsible for properly allocating money and forecasting the future. Other tasks can include:
- Investments
- Capital or asset purchases
- Credit
- Budgeting
- Financial soundness
These are all easily done as a smaller business. As your company grows into the larger side of small and into the medium category, it can be difficult to handle as a CEO.
That is why a outsourced CFO may be an ideal scenario, both saving money but bringing necessary expertise.
Lower Costs
First, you can outsource the CFO position for a lower cost. A small or medium business may not require a full time CFO, but to grow to the next level of being a big busines, a CFO is necessary.
When you hire part-time or outsource, you can have them focus on larger projects and tasks while others monitor the day-to-day operations. Managers and team leaders can report up to the CFO, providing the data necessary to make decisions.
For example, you can have a full-time manager collect and organize data. Once the CFO is in the office for that day, they can focus solely on those data points and organize a plan, without costing the company a full-time salary.
Eventual Need of a Full-Time CFO
Another reason to outsource your CFO is at some point, if your business grows large enough, you will need a full-time CFO. When you have a part-time CFO on staff, it can make the hiring process easier. There will be an executive already familiar with company processes and goals within the organization.
Macro Decision Making
Lastly, your small or medium business can rely on an individual that has CFO experience to help drive decision making. With an outsourced CFO, the organization can use their experience instead of requesting them drive daily operations.
If you have a CFO working a few days a week, at a high level they can advise and ensure processes are moving in the right direction. Also, they can focus on data points such as budgets and investments.
Keep in mind that a small or medium business needs to have as much free capital as necessary. A part-time CFO is a perfect mix of internal expertise and having a lean budget.
Money, cash flow and capital allocation are all important topics. As your business grows it may be worth letting go of some financial tasks to allocate your time efficiently and letting an expert advise your team. A CEO can only handle so much, and as your company grows a CFO will become vital.
