What is an Outsourced CFO?

Last Updated on June 15, 2023

In today's rapidly evolving business landscape, virtual CFOs (Chief Financial Officers) are gaining popularity. But what exactly makes virtual CFOs attractive and how can it benefit businesses? 

When should startups outsource CFO? A Chief Financial Officer (CFO) is responsible for everything related to your company’s finances. Their roles are equally critical in influencing stakeholders, driving strategy and making key decisions that have a significant impact on the business. Often, hiring a full-time CFO may be costly and can be a financial burden for startups, this may be a reason why not every small and medium enterprise (SME) in Singapore has a CFO. This is when an outsourced CFO may be helpful by adding a level of flexibility while receiving similar professional services for your company without the hassle of paying full-time salaries.

An outsourced CFO will fulfil that same role, and as the name suggests, they are financial experts who join your company and work with you on a contract basis.

What does a virtual CFO do to help your company?

Essentially, your outsourced CFOs have overall responsibility for the strategic planning and running of the company’s financial activities — just like your average CFO. They usually oversee the teams who are responsible for tactical issues like maintaining accurate, timely books, and correctly meeting your tax liabilities.

CFOs will use the information and assess the cost of doing business and also the potential risks associated with that your business might face. They are responsible for strategic operations such as the below to achieve your financial objectives:

• Overseeing financial reporting, forecasting, and budgeting

• Overseeing risk and compliance management frameworks

• Track and give regular updates on your financial metrics

• Review and analyze your KPIs

• Guide plans for future growth

• Board deck review and financial slide creation

• Regularly evaluate your financial hygiene and recommend best practices

• Advising the management team to improve your financial position
  
  

An outsourced virtual CFOs, like any outsourced professional, usually has diverse experiences and work histories from working across a wide range of companies. Businesses who partner with outsourced CFOs will expose them to different strategies, investment approaches, and technology tools which can boost values to the company.

Why Get a Virtual CFO?

Hiring a full-time CFO is expensive. For many early-stage companies, you could be managing bookkeeping and expense management on your own. However, as your company grows, you may want to put your finances in more experienced hands in order to scale. An outsourced one can be the right option for your startup or small business during the growth stage, where you can engage one on a project basis to help manage the company’s financials and improve processes, for a fraction of the cost. 

As your company evolves and matures, this outsourced CFO would lead to significant cost-value benefits as it allows the company to focus more on core business functions. If you’re still not convinced, here are 7 ways outsourced CFO services can help your startup.

Finding the Right Outsourced CFO for your Company 

Just like an in-house hire, it’s essential that your outsourced CFO be a good fit for your company. Here are a few things that you would want to keep in mind:

• Relevant experience.

Look for a virtual CFO provider with experience at companies similar to yours, where work can be directly linked to the relevant needs that your company may require. As different companies are in different markets, they might have different metrics to prioritise and different challenges to planning for.
 

• Your objectives.
  
  

Outsourced CFO services providers usually offer a range of services – for example, our team at Lanturn can help with Financial projections, Fundraising support, Redesigning of accounting processes, and Cash crisis management. To ensure the company receives the most benefit from your virtual CFO, it will be best for the company to know the objectives before engaging one. It will help you know if the company needs certain analyses done, or if it needs guidance on what key benchmarks you should aim for.

In short, outsourcing your CFO role might just be more feasible than you think! The benefits of outsourcing apply as much to these high-level roles as your back-office tasks, and when you have the right partner in your corner, you’ll be surprised at how quickly your business will take off. Interested in learning more about our services? 

Book a time and speak with an expert here.