The ultimate guide to outsourced CFO services for fast-growth businesses

Trying to scale your business to 8 figures and beyond?

You’ll no doubt know the importance of carefully managed finances and cash flow to do this.

But how do you keep your finances on track through periods of fast growth?

Outsourced CFO services can help.

By using the expertise and strategic guidance of an Outsourced CFO you can keep your business finances moving in the right direction (without the $150K+ per year price tag of hiring an in-house CFO to do this for you).

In this article, we’ll explore why outsourced CFO services can be a great option for businesses looking for sustainable and profitable growth.

Let’s start with the basics…

What is an Outsourced CFO?

An outsourced CFO is an external finance leader that helps to manage the financial operations of the business.

The finance leader helps to –

1. Strategically align the finances in line with the goals of the business.
2. Plan the cash flow, liquidity, and financial assets.
3. Define indicators which tell about financial performance and deviation from the plan
4. Bring efficiency so that the company has the right systems in place as they grow
5. Provide financial insights which can be used for business decision making
6. An Outsourced CFO can be an interim, full-time, on-contract, or part-time role, depending upon the budget and requirements of the business.

But first, why do you need to Outsource CFO services?

As a business leader, it’s likely that your key focus will be on growth and product/service development. Building a dedicated in-house finance team requires time and costs. These costs might be better spent hiring staff in other departments or making investments in product growth etc.

Key Benefits of Having an Outsourced CFO

Outsourced CFO services can have several advantages for your business. It benefits fast-growing businesses which require both financial management and insights for growth:

• Cost-effective solution. Outsourced CFOs are more cost-efficient than hiring an in-house CFO and a dedicated finance team. You can hire an outsourced CFO on contract, interim, part-time etc. It means that you are only paying for the fractional services provided. This helps you save on multiple costs and employee benefits that you will have to offer to the in-house team.

• Get Expert advice with the right industry experience. An outsourced CFO has meaningful industry experience (often working with similar businesses to yours). They can use their expertise for better financial fine-tuning for your business. As independent consultants, they can offer an unbiased and out-of-the-box viewpoint. It helps in better decision-making. Most importantly, they come with a fresh perspective. This might be an unconventional approach compared to the company’s normal way of dealing with situations. But it could help in better optimization of processes.

• Focus on product growth. As a leader of a growing business, it is crucial that you focus more on building the product and features around it to gain market share. Having an outsourced CFO will help you save time in managing and leading the finance function. This time can be used to focus on product growth.

• Tax Management & Advice. For a growing company, tax management is important to ensure compliance. Outsourced CFOs will help you to create tax-efficient structures. This will have a long-term impact on organizational set-up and profitability. Having an expert team like Novaa to manage taxes can help your team to focus on growth while we manage compliance and your firm’s profitability.

• Streamlining existing operations. One of the most important roles of an expert CFO is to modernize and streamline your financial operations. This helps you to track better and optimize costs. It helps to streamline the cash flow for expansion. It improves liquidity and ensures the good financial health of the business.

• Leverage the power of modern accounting. Outsourced CFO services will help you evolve from a traditional accounting system. It will help set up modern accounting tools. A modern accounting system is integrated with the right expense management and AP/AR management tools. It can make your firm function easily. It takes care of right from getting paid by your clients to paying vendors, payroll etc. Modern accounting systems can streamline your business operations.

• Preparing for future IPO. Financial structuring is the cornerstone of being IPO ready. Having the right experts like Novaa will help you get ready for the future. It will prepare your financials such that when it’s time to go public, your firm will have all the necessary financial trials and documents in place.

• Steering through Mergers and Acquisitions. A fast-growing business with differentiated offerings and a high growth trajectory can always be a great candidate for a merger or an acquisition. A diligent outsourced CFO can help you to successfully navigate mergers and acquisitions. By weighing the financial aspects of the deals, you can choose the one which is the best for your business.

• Mitigate risks and prepare for unforeseen situations. It is always good to be prepared for any unforeseen conditions like market crashes, inflation, etc. Hiring outsourced CFOs can help you prepare beforehand. It helps build a robust financial plan that can factor in various market conditions and scenarios so that you are prepared for the future.

How to find the right Outsourced CFO services?

Here’s a checklist for finding the right Outsourced CFO for your business:

• Credentials and background of the CFO: It is important to have a CFO that has strong credentials in your industry. Look at someone who understands the industry you operate in and has a track record of helping businesses similar to yours

• Team: You need to hire a finance team, along with an outsourced CFO to run the entire function. The team is pivotal in implementing the strategies directed by the finance leadership. This is also something that can be managed externally as part of an outsourced finance function where you benefit from bookkeepers, controllers, and CFOs all working together

• Cost: Cost is a major reason for outsourcing financial services. Having a cost-effective service provider who can offer high-quality services is a great combination.

• Industry experience: You should look for an outsourced CFO with a significant experience in your industry. Similar to how our client Makeshift found the right Financial Partner that can understand the Tech SaaS Industry. This is crucial in executing financial strategies and building an efficient finance function.

Case Study: MakeShift Finds Strategic Financial Partner with Saas Expertise

• Collaboration: Communication and coordination are pivotal for the Outsourcing CFO to work closely with the company leadership. It delivers the best results. Regular calls and meetings are a great way to better collaboration within the teams.

• Use of modern tech: AI and data analysis tools have levelled up the game. It gives insights that can help businesses in better financial management. AI-backed reports can aid in better accuracy and faster decision-making. A CFO who is proficient in using modern tech keeps the business ahead of the competition with the right advice based on financial insights.

• Expertise in Tax Management & Advisory: Having expertise in Tax Management keeps the financial compliances on time. This can save you from a lot of potential issues that any growing business would not want to deal with. Novaa offers a team of experts in tax management who will help you stay compliant. They will help you get the right tax benefits for profitability and efficiency.

Why is Novaa the right Outsourced CFO service for your fast-growing business?

Novaa has a team of qualified experts extending our CFO services to fast-growing businesses.

It helps you to achieve your growth goals without worrying about your financial operations. We offer dedicated and curated services for different stages of business growth i.e. Launch, Grow, Scale, and Mature.

Our fully outsourced finance team helps you find cost-effective financial solutions. We have expertise in setting up basic accounting processes and systems to tax management.

Our outsourced CFO team offers value-added services like:

• KPI analysis,
• Financial Forecast Models,
• Budgeting, etc.

for a tailor-fit solution based on the business requirements.

Book an appointment to find the right Outsourcing CFO services for your business with Novaa.