In today’s world, almost everything is stored remotely. So, why not integrate that digital practice into your hiring process and remotely hire an expert who has CFO outsourcing services?
CFO outsourcing services allow companies of all sizes to hire financial experts who can handle their financial strategies. Hiring a financial advisor who is not part of your actual company can ensure that your advisor can work objectively without being influenced by the culture of your company, which can make hard decisions harder.
When you outsource CFO services, you will save yourself time and money. So, now that you know that outsourcing CFO services are possible, let’s look at how you can make it work for you.
How Do CFO Outsourcing Services Work?
CFOs oversee many different tasks and offer a wide array of services. They focus on the big picture by looking at how small factors have a big impact. Keep reading to take a look at CFO outsourcing in action.
When Should a CFO Be Outsourced?
C-level positions can be extremely difficult to fill. This is not only because they require a consummate professional but it’s also because a C-level status is a high-paying position.
Most start-ups do not have the funds to hire a top-level CFO, and many companies find that they do not need one in the early years of their business. As such, outsourcing CFO services is often preferred.
Why Is a CFO Important To a Company?
The right CFO or CFO company will protect your financial interests. CFOs keep businesses in compliance and interact with investors on a professional level, while also being able to simplify value propositions and minimize risks. CFOs also create balance sheets and know how to manage books.
How Much Does an Outsourced CFO Cost?
One of the most obvious reasons to outsource a CFO is the price difference between having someone on payroll compared to paying someone only when you need them. A salaried CFO could cost you six figures, while an outsourced CFO will cost a fraction of that. Outsourced CFOs can cost anywhere from $1,000 to $12,000, though some CFO companies charge rates as low as $300.
9 Reasons Companies Use Outsourced CFO Services
There are many reasons why companies outsource their CFO services. Here are nine reasons outsourced CFO services could be the right choice for your company.
Save Time and Money
With outsourced CFO service providers, you can control the number of hours a CFO company works, and therefore, how much you will have to pay them for said services. You will also have a higher output of work in the same amount of time it would take you to complete in-house CFO-related tasks.
This distribution of work will save you and your team a lot of time while also working within a predefined budget that you have set. Not having to carry the weight of a salaried CFO, their inopportune vacation days, taxes and benefits that go along with in-house CFOs means you’ll have more funds to allocate to other areas of your business.
Handle Financial Challenges For You
Trucking companies file taxes quarterly, and they have to adhere to about 10 different types of tax obligations as well. Even if you’re prepared to cover all of the costs that are associated with trucking companies, unexpected expenses can still arise, too.
Though insurance will cover the majority of incidentals, when it comes to scaling your fleet, figuring out where to cut back in terms of expenses is key. It’s important to streamline your business, manage financial hardships and monitor financial expenditures, which is where CFO companies come into play.
Improve Your Business Processes
As the person responsible for both the accounting and bookkeeping departments of your company, an outsourced CFO service provider can ensure that matters are handled in a time-sensitive and priority-first manner.
The right outsourced CFO services company will make sure your company policy dictates how they handle the timeline of outstanding invoices. That way, invoices won’t remain in a backlog, resulting in overdue invoices.
Similarly, a CFO company will advise your company on how to sell any overdue invoices to factoring companies. They can also advise you as to the risks you might run into based on various factoring contracts.
Benefit Your Capital Allocations and Budgets
CFOs can help you decide when, where and how you spend your business-related cash. Knowing when to pay for something cash in hand compared to when paying for business expenses with a credit card is better will depend on how your money is allocated.
Whether items should be deferred or consolidated, as well as the money you have coming into your business, will also play a role in these decisions. So, CFO outsourcing services can create a budget that works for your business.
Forecast and Improve Your Cash Flow
Looking further down the line than budgeting, forecasting looks at the road ahead for your company, making an educated conclusion about the direction and financial future of your business.
Where a budget deals with the day-to-day, forecasting focuses on a 5 to 10-year projection of your business’s expenses, income, growth, necessary investments, and assets should look like in a practical format.
Forecasting should act as a roadmap to take you from where you currently are, assess the business to improve cash flow, and correctly scale the business to where you want it to be within a certain time frame.
Assess Risks
One of the understated roles of a CFO is to mitigate risk. In the ever-expanding world of trucking and logistics, you may want to expand your fleet or your offerings to keep up with competitors, but a CFO services company will help reel you back in so that you don’t stretch yourself too thin while also putting your business on the line.
A great CFO service for a trucking company will have personalized insight into all of the following trucking-specific financial risks (and more):
- Fleet Ownership:
- New
- Used
- Leased
- Invoice Handling:
- Net Time
- Outstanding Reminders
- Overdue Fees
- Invoice Factoring Contracts:
- Recourse
- Non-Recourse
- Modified Recourse
- Business Expenses:
- Cash
- Credit
- Accounting Basis:
- Cash-Based
- Accrual
- Tax Preparation:
- Estimate
- Safe Harbor
Develop a Scalable Model
Many people start businesses to work for themselves, but at a certain point, most people want to stop living to work, and exit or pass on their business to a new generation or partner that is just as excited as you were the day you took on the venture.
Before any of that can happen, you should make sure that you’ve built a business worth leaving, which means expanding the fleet over time and not just starting at 100 and depleting all of the other funds you need to operate your business.
A CFO services group will implement timetables and benchmarks that will signal moments for you to expand your fleet or services, while also keeping underperforming sectors in check.
Maximize Your Profits
As a new, or even seasoned business owner, the initial terms of your agreements with your vendors, servicers or third-party contracts may not have been as favorable as they could be, but nothing is set in stone.
In the words of the late Carrie Fisher, everything is negotiable, and a CFO services company will make sure that you have the most favorable terms every step of the way where money is concerned.
Not only will an outsourced CFO group look to negotiate bad contracts, they will also look at spending habits to consolidate and remove what can, take deeper looks into abnormalities, recommend 3PL options when needed, and make sure that you are in line with industry pricing and trends.
Seek Help With Preparing Your Taxes
With quarterly filings and payments, excise tax, gross receipts tax, franchise tax, property tax, IFTA compliance, employee tax, self-employment and federal income tax, taxes can take up a considerable amount of time for a trucking company. Outsourcing CFO services for tax preparation alone will save you time.
Don’t Let an Internal Service Affect Your Revenue
If you are a small to mid-sized business, you will likely need to hire a CFO. However, you don’t have to worry about affording a six-figure CFO salary because CFO outsourcing services are an option as well.
Sign up for a FreightWaves e-newsletter to stay informed of all news and trends impacting supply chain careers and operations.