What Is an Outsourced CFO and Why Does Your Small Business Need One?

Businessman made word CFO with wood building blocks.
If you’re a small business, a full-time CFO may not be practical or affordable. Learn more about the benefits of an outsourced CFO right here.

Small businesses make up 48% of the private workforce in the U.S. They’re considered one of the main drivers of the economy. 

Small businesses were responsible for much of the innovation we’ve seen over the last decade. They’ve also provided much of the job growth since the financial crisis.

But only 40% of small businesses are profitable. Only 30% break even and another 30% continually lose money.  

Many small-to-medium-sized companies do well without financial guidance early on. But eventually, there’s a tipping point. When your business’s finances become so complex that you struggle to make important decisions, it’s time to get help. 

Most small businesses can’t afford a full-time CFO. An outsourced CFO can help you take care of all your business’s financial details at a fraction of the cost. If you’re interested in how CFO outsourcing services could help your business, find out more below.

What is an Outsourced CFO?

CFO stands for “Chief Financial Officer.” Many large companies need a full-time CFO on staff.

Smaller businesses should have access to CFO services from day one. But they don’t necessarily need to hire internally. Hiring an outsourced CFO allows you to obtain financial expertise on a budget and help your business grow. 

The primary service an outsourced CFO provides is to offer advice and help you fund your business. But there are other responsibilities a CFO can handle. 

Accounting

An outsourced CFO can provide accounting services. They’ll oversee your small business’s financial functions. They can even train your staff in best practices and help you make decisions.

Accountants analyze and interpret financial data. They then report on business performance to company leaders. This helps leaders make more informed decisions.

Bookkeeping

Bookkeeping services and accounting services are similar. But there is a distinction between the two.

Traditionally, bookkeepers were responsible for recording financial transitions. They are financial record keepers. Many of these processes are now automated, however. 

Today, most bookkeepers are responsible for verifying the accuracy of financial data and generating financial. Your outsourced CFO can provide this function and act as your accountant. This gives you access to strategic consulting as well as accurate financial reporting. 

Tax Assistance

Many small businesses miss out on tax deductions because they aren’t aware that they qualify for them. Preparing your taxes accurately is also crucial to avoid an audit.

In 2016, 77% of CFOs and tax directors said they’d seen an increase in audits by tax authorities. Your outsourced CFO can help you file sales taxes and consult with a tax preparer to maximize your deductions.  

Is it Time for CFO Outsourcing?

Every small business reaches a point where they need help to grow. If your business finances have become too complicated to handle on your own, it may be time for an outsourced CFO.   

Schedule a free consultation with Business Cents to learn how you can grow your Spokane business. Or, call now at (855) 534-3984.

We provide bookkeeping services, payroll services, and QuickBooks consulting in the Spokane, WA area. 

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