Is it counter intuitive for companies to rely upon outsource CFO services given the range of duties and responsibilities that fall under their banner?
From financial planning to risk management procedures, reporting, data analysis and record keeping, this is a role that demands much of the professional tasked with running the numbers of a business.
For all of those reservations that are mentioned by dissenting voices, there are brands that continually seek out a third party to be their chief financial officer.
There must be a rationale behind this movement given the sheer volume of case studies and corporate relationships that have been established in this field.
Let us delve into the reasons behind the outsourcing boom that is taking place as CFOs become more flexible in their role.
Virtual Component For Flexible Delivery
The first thought that a manager has when considering the merits of outsourced CFO services is the need to introduce a new team member or members into the workplace environment. Just that physical presence alone can threaten to obstruct regular business practices, but in 2018 that is not necessarily a way of operating.
There are virtual CFO providers who can offer their reporting functions and decision making processes one step removed from the premises. Whilst the communication will not suffer given the speed and efficiency of smartphone and desktop applications, small to medium enterprises who are concerned about interference can rest assured they have an outsourced party carrying through on their financial matters.
Fresh Pair of Eyes on Current Financial Issues
Bringing in outsourced CFO services helps to deliver an independent perspective to an organisation that will already be operating under pre-established relationships and preconceptions. The studies that have examined how effective an objective participant can be is overwhelming, as there is a drive in innovative thinking that seizes opportunities from a distance. The term “fresh eyes” can be overused in many instances, but this is evident when it comes to a financial officer that is devoid of the limitations and common practices that an enterprise can garner.
Suitable For Major Projects
Outsourced CFO services are commonly brought into the fold for specified short-term projects that allow for that distance to be beneficial. Without delving too heavily into the foundation of the business where sensitive information has to be disclosed, certain parameters can be drafted that includes a time frame and budget to run the project from beginning to end. From budgeting to processing the payroll and running a profitability report that illustrates the success or failure of the venture, this is a means of accessing short-term expertise without the need to invest in a long-term commitment. It becomes a transaction of convenience.
Allow For Focus On Other Departments
It is always the role of the chief executive officer (CEO) to make a sound judgment on outsourced CFO services. Why this corporate agreement on a third party remains viable is that it allows the CEO to focus on other departments within the business safe in the knowledge that the financial element is being cared for and considered simultaneously. There could be growth plans, a marketing push or a reshuffling in human resources that must be catered for. This can occur as the CFO runs an audit or financial forecasting in the interim.
Summary
Outsourced CFO services are either valid or invalid depending on the attitude and positioning of the business in question. There is simply no right or wrong answer on the topic, but those that have embraced this flexible and modern business practice have reaped rewards that improves the bottom line and allows the brand to plan forward with confidence. Entrusting an individual or firm with the duties of a CFO can be daunting, but doubts can only emerge if the organisation has not carried out their due diligence beforehand.