As a business owner, there’s nothing that can distract you from pursuing your company’s goals… Except managing finances. Accounting can be a thorn in every top executive’s side, especially when it feels like other crucial business tasks are piling up, but outsourcing accounting and bookkeeping services is a simple solution. If accounting activities are growing increasingly more difficult to manage but you don’t want to allocate funds to a new full-time employee, it might be time to consider outsourcing CFO services.
What is a CFO and What Do They Do?
Let’s define CFO. A chief financial officer, or CFO, is a senior executive that manages the financial operations of a company. They are responsible for tracking cash flow, financial planning, and correcting flaws in the company’s financial strategy. Some of their specific responsibilities include:
- Overseeing the capital structure of the company. CFOs help improve the debt ratio, the debt-to-equity ratio, and the capitalization ratio.
- Cash flow forecasting and retrospective analysis. A CFO accurately follows inflow and outflow patterns to project a company’s financial position in the future (and subsequently plan ahead for that financial future).
- Manage compliance. CFOs have an expert-level understanding of the regulations that pertain to the industry, and they can ensure that the company complies with federal, state, and local laws.
In simple terms, CFOs are responsible for a company’s financial past, present, and future!
Outsourcing refers to the process of hiring an outside party with specialized expertise to be responsible for a function that would otherwise be done internally. There are many reasons why a company might choose to outsource services, including:
- Freeing up internal services to work on other crucial business functions
- Leveraging an expert knowledge base from anywhere in the world
- Accessing talent that is unavailable internally
- Saving money on operational and labor costs
Top Reasons for Outsourcing Accounting and Bookkeeping Services
Outsourcing your accounting and bookkeeping gives you the freedom to turn your attention to other aspects of the business. As your business grows, you will need additional support. By outsourcing, you avoid the additional time and expenses it would take to recruit, interview, hire, onboard, and train a full-time in-house employee. An accounting firm can match your company to the appropriate outsourced CFO services, who quickly analyze your company’s financial history and assess the current financial position. With detailed knowledge of the whole picture, your outsourced accounting team or outsourced CFO can modify or provide input on financial strategy as a business grows. They can help navigate changes in the market, sudden dips in business, and even help you acquire more outsourced resources as your accounting needs change.
2) Higher Work Quality and Expertise
Attention to detail, industry experience, and mathematical skills are necessary for an accountant’s financial advice to be relevant and lead to real growth. An outsourced accounting team is available right at your screen with a vast pool of knowledge, skills, and resources at their disposal. While your in-house accountant’s mistakes might go unnoticed, an outsourced accounting team has up-to-date and detailed knowledge of accounting principles. They rely on technology and automation to streamline certain repetitive processes, thus reducing the chance for human error even further.
3) More Efficient Money Management
Perhaps the greatest impact an outsourced CFO can have on a company is identifying and fixing problems with the budget. This alone can have a significant impact on a company’s financial future. By providing a personalized financial approach based on the company’s history, a CFO can stop penalties for non-compliance, reduce the risk of internal fraud, improve and monitor cash flow, and identify poor uses of money such as ineffective or outdated marketing. There are so many cracks for money to seep through unnoticed, and tightening up the basic financial strategy and foundation of a company sets it up for a more economically savvy future.
4) Cost Savings on Recruitment
That’s right – more cost benefits! Outsourcing CFO services helps companies avoid excessive operational costs. It takes a lot of resources to recruit, interview, hire, onboard, train, and supervise employees. If the company experiences high turnover, replacing these in-house services will create a steady negative output of cash. Bypass these struggles entirely by relying on outsourced CFO services, which bring the sharp eye and expertise to do whatever finance-focused project you have in mind.
5) Risk Reduction
Outsourced accounting allows you to divert attention to other areas of the business knowing that your finances are protected. Think of outsourced accounting as an unbiased third-party with expert financial and mathematical knowledge. An outsourced CFO can be part of your company’s system of checks and balances that protect against internal fraud and financial mistakes.
That’s not to mention the enhanced security that comes from outsourcing your in-house accounting functions. How does your company internally store confidential information, and who has access to it? What is your system of protection from fire, theft, and hackers? Do you have a backup data center in case your servers are stolen or destroyed? The rigorous safeguards of an outsourced CFO may be measurably more effective than your in-house checks and balances.
6) Meeting Compliance Requirements
Accounting experts monitor what is happening across the industry and know how to adjust financial strategy accordingly. They know the laws and regulations, stay updated on the latest regulatory requirements, and understand the best way for your company to demonstrate compliance. Outsourcing a professional accountant can help ensure that you are in line with state and federal business laws. Not doing so can lead to significant financial repercussions.
Making the decision to outsource your accounting needs can save your business time, money, and labor hours, freeing your staff to work where their skills lie. With outsourced services, you pay for what you need and nothing more.
Outsourcing Accounting and Bookkeeping Services
We have your outsourced CFO and accounting services right here. At UNALP CPA Group, we provide a VIP level of outsourced accounting services that relieve our clients from the burden of accounting duties, so they can focus on growing their business instead.
Want to know more about how outsourcing accounting and bookkeeping services can save you money? Contact us at Unalp CPA – we’ll be happy to answer any of your questions. You can give us a call at (925) 574-8855.