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As a business owner, you surround yourself with experts such as tax accountants and lawyers. In a growing business, there comes a growing need for strategic and financial business planning – this is where an outsourced CFO comes into play.

Larger businesses employ full time CFOs in house but what about small to medium sized businesses? They would get tremendous value from the insights and capabilities of a CFO but don’t have the budget or need for someone full time. What would be a better fit is accessing a CFO on an outsourced contract basis per month.

This article will discuss what an outsourced CFO does, what to look for, when to consider engaging one and how they work with your existing accountants and lawyers.

What does an outsourced CFO do?

They act as an external advisor to drive strategic and financial planning in your small to medium sized business. They can assist on a weekly to fortnightly to monthly basis as needed delivered online or face to face. Key function areas include:

  • Cashflow improvement
  • Profit analysis and improvement plans
  • Identify and manage risks
  • Prepare monthly management & KPI reporting
  • Advisory board management
  • Bookkeeping and payroll oversight
  • Act as a sounding board for management
  • Provide a financial health check assessment
  • Work with tax accountants and lawyers

What to look for?

You really want someone who has been there done that. Many accountants are tax and compliance experts but you want some who has the expertise in business and CFO advisory. 

Some questions to ask:

  • How much tax and compliance work do you do -vs- advisory work?
  • What type of advisory work?
  • Tell me about some of your current CFO advisory engagements?
  • What are your credentials? 
  • What does your process look like if we are to work together?

When should I engage one?

Micro to smaller businesses should be catching up with their accountant at least quarterly and doing some basic business planning. As a business reaches $1M in revenue and beyond it would make sense to engage an outsourced CFO and as you continue to grow they can be involved more and more to give you the strategic and financial support you need.

Outsourced CFOs can also be engaged when certain needs arise such as:

  • When a finance manager resigns and you need someone on an interim basis before a role is filled
  • Getting a business ready for investment
  • When you acquire a business or bolt on another acquisition
  • Getting a business ready to sell

How do they work with my existing advisors?

An outsourced CFO will continue to work with your bookkeepers, tax accountants, advisors and lawyers. Your tax and legal needs will grow as you grow and a CFO is well positioned to understand these needs, brief external parties and interrupt any complex accounting and legal jargon so management can clearly understand and make informed business decisions.

Key Takeaways

An outsourced CFO will bring high level strategic and finance expertise to your small to medium sized business to help you grow and scale.

If you are looking for an outsourced CFO, our experienced business advisors can assist. Contact us today for a discovery call to discuss what your options are.

Want to speak with a business advisor?

    Brad Turville

    Brad is the Director of Business Advisory at BJT Financial, an advisory firm for ambitious business owners. BJT Financial is disrupting Australia's accounting industry through transforming the way in which businesses access a true business advisor. Brad specialises in CFO Advisory, Financial Modelling, Profit / Cash Improvement and Buy / Sell Business.