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Demystifying the role of an outsourced CFO

Demystifying the role of an outsourced CFO

Technology and flexibility have been the key to business survival during the pandemic, it has also changed the way workforces are structured for the future. With a greater reliance and trust in technology, it allows businesses to access the right talent and skills that a growing business needs, regardless of their location.

As this reliance advances, popularity for an outsourced CFO (also commonly referred to as a virtual CFO) has grown, by providing businesses with the opportunity to access invaluable strategic and business financial planning solutions without the need to be present on a full-time basis or physically be located onsite.

Although, there still remains a large number of businesses who prefer to remain in a traditional structure with their own in-house CFO, the traditional model is being challenged as businesses look towards an outsourced CFO model. Here we break down some of the perceptions:

An outsourced CFO is costly, why wouldn’t I just hire my own?


An outsourced CFO can be significantly more cost effective than having an in-house CFO, particularly if you don’t require a full time CFO. Business owners often overlook the hidden costs of having an in-house CFO including, on-boarding, training, payroll on costs (superannuation, payroll tax, FBT and their associated administrative and compliance costs) and not to mention the recruitment and retraining involved with staff turnover. Whereas outsourced CFOs are used on a “needs” basis, meaning they are only paid for the hours worked.

Outsourced CFOs can also provide their own teams, meaning concerns over maintaining in-house finance team employees is no longer the burden of the business owner. Rather this burden is borne to the outsourced CFO. They will take on the role of controlling employees, with transitions being dealt with effortlessly and efficiently.

Having access to technical experts in various fields and extensive staffing resources allows outsourced CFOs to ensure work is completed by the right people at the right levels, reducing the risk of unnecessary costs and inefficiencies. This also allows them to identify opportunities and threats that the business could face.

I already have a CFO, I do not need an outsourced CFO


Although you may already have an in-house CFO, they may not be fully utilised or may not have the capacity to provide strategic planning advice if they have become locked down in day-to-day matters of the business. Outsourced CFOs have teams supporting them with lower level financial management such as, accounting, payroll and bookkeeping, allowing leaders to focus on the business’s development and growth. Outsourced CFOs often work well alongside in-house CFOs to provide the business owners a holistic service.

Outsourced CFOs do not know my business well enough to provide me with specific and tailored advice


Outsourced CFOs insights are invaluable as they draw upon experience and best practice, witnessed with other clients, to implement the best suited strategies to your business.

However, it is important to hire an outsourced CFO with the same mentality you have when hiring staff for your organisation. You need to be confident that your provider will work in unison with you towards the business’s goals and objectives.

My financial data is being sent overseas to be processed


Whilst many operators still use this model and it has its merits, many business owners would be surprised to learn how much of the work (if not all) is actually performed by Australian professional staff.

As economies around the world rapidly closed due to the pandemic, outsourced CFO providers that relied heavily on their offshore providers from India and Philippines in particular found themselves struggling to provide the deliverables they were engaged to. This had catastrophic effects on some organisations as they were forced to rapidly adjust to working remotely while having to pick up additional functions that could no longer be completed externally.

On the other hand, outsourced CFOs and their teams that are based in Australia had little adjustment to make as they were already accustomed to working remotely with their clients whilst incorporating on-site and in-person meetings as part of the scope of work they do.

I’m too small to have a CFO


Every business needs a CFO! Sometimes it’s a role that is played by the CEO/business owner. These people are wearing so many ‘hats’ that there is an opportunity cost of the business owners not being able to fully dedicate their time to doing what they do best.

An outsourced CFO can work as little or as much as you need them, the services are tailored to a business’s specific requirements whether it be business planning, budgeting and forecasting, management of all or part of the accounting, payroll or tax.

Every business can benefit from a strategic financial thinker to help drive better business decisions.

An outsourced CFO is just one more role for me to worry about


An outsourced CFO is something you do not need to worry about – they have the requisite technical skills and experience gleaned from working with similar businesses and are a team working together to help you grow your business. They look after you and ensure that you remain focused on managing your business.

Get the support that you need

Pitcher Partners Business Radar report unveiled a key challenge faced by business owners is ‘professional loneliness’. Business owners and leaders can often feel isolated with there being a lack of support around them. Support networks of likeminded individuals provide leaders with an arena to share their ideas, challenges and opportunities, helping to lower their feelings of frustration and uncertainty that often halt them from taking the next step to grow their business.

An outsourced CFO can provide much needed support by guiding leaders through challenges and assisting them to take advantage of opportunities. They also provide leaders with the opportunity to focus on working “on” the business and not “in” the business. This is particularly relevant in the post-COVID economy, with many leaders now having to rethink the direction of the business to suit the evolving environment.

Take the next step

On-boarding an outsourced CFO is a cost-efficient way for businesses to gain access to strategic and financial advice from an experienced professional. They are able to provide much needed stability and flexibility to the business while offering leaders with the support needed to navigate through the post-COVID economy. If you would like to find out more about outsourced CFO services, then please contact your Pitcher Partners representative.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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