Outsourcing the role of a CFO – this is how it happens!

Outsourcing the role of a CFO is a strategic move that many companies consider, especially startups or growing businesses. It is advisable to consider outsourcing CFO responsibilities when financial planning and management are not clear, business reports are inadequate, or when the top management is focused on core business activities. Additionally, outsourcing CFO duties can be beneficial when financial restructuring is needed in rapidly growing companies. An external expert can provide valuable insights and help track key performance indicators essential for decision-making at the executive level. Moreover, external CFO services offer peace of mind to company leaders, ensuring a clear financial roadmap and efficient management of financial functions. By outsourcing CFO responsibilities, companies gain access to a specialized team of experts rather than just one individual, enhancing financial operations and decision-making processes.

Outsourced CFO Responsibilities

When considering hiring an outsourced CFO, it is essential to define the areas where the expert will be responsible. Typically, an outsourced CFO takes charge of the entire financial operation of a company, including:

  • Financial reporting and forecasts, managing relationships with accounting firms, and fostering a financial management culture within the organization.
  • Profitability analysis and business metrics, integrating data from various sources like accounting, time tracking, or working capital efficiency.
  • Preparation of materials for the board and executive team meetings.
  • Participation in the business leadership team and/or company board meetings.

However, specific financial tasks should not be outsourced to an external CFO, such as:

  • Bookkeeping and accounts payable/receivable.
  • Payroll processing and HR tasks.
  • Routine tasks usually handled by accounting firms and bookkeepers, like VAT returns (although the outsourced CFO can oversee the quality and improvement of such collaborations).

Outsourcing Process in a Nutshell

The process of outsourcing CFO services typically begins with an initial meeting to understand the client’s needs, assess the current financial processes, and evaluate the level of expertise and structure within the organization. Collaboration usually starts with a small development project to streamline processes, responsibilities, accounting matters, and reporting. The next step involves planning key performance indicators to enhance profitability and growth. On a monthly basis, the outsourced expert handles financial reporting, participates in executive meetings, and occasionally attends board meetings. The typical workload for an outsourced CFO ranges from two to six days per month per client.

Hands-On Approach of a Good Outsourced CFO

A competent outsourced CFO not only operates at a strategic level but also immerses themselves in the client’s business as if it were their own. They should be able to work closely with accountants, communicate financial metrics clearly to employees, and engage in meaningful discussions with business leaders to drive progress and improvement.

For more information on CFO as a service and the key responsibilities of an outsourced CFO, feel free to explore the following articles:

If your company needs expert guidance on financial matters, don’t hesitate to contact Finaly’s knowledgeable team for collaborative solutions!

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