So, your startup needs some financial guidance, but is it the right time to bring on an in-house CFO? Often, startups need to fill other key roles to drive growth before focusing on a CFO role. But just because you aren’t ready to bring someone in for that position doesn’t mean the need has to be left unfilled. Many startups opt for outsourced CFO services to get the strategic financial guidance they need without committing to an in-house role.
In this blog, we’ll tell you the top seven outsourced CFO services and how they can help you.
What Is an Outsourced CFO?
An outsourced CFO is a strategic financial expert that services as a consultant for a business on an hourly, part-time, or contracted basis. They have a lot of experience in various high-level financial roles for different company times and sizes. They can help with anything from strategic planning and scenario modeling to financial projections and unit economics, and everything in between.
7 Ways an Outsourced CFO Can Help
What exactly can an outsourced CFO do for you? Let’s take a look at the services they can provide.
Financial Projections
Your startup will need financial projections to show the revenue potential that will help attract investors. These projections will also form the basis of your operational budget and dictate how much investment you’ll need. An outsourced CFO can use your financial results from previous reporting periods to make a prediction of how the business will perform in the coming months.
Scenario Modeling
An outsourced CFO can help with scenario modeling by creating alternate projections for how your company would perform under various conditions. For example, they could model a scenario showing both aggressive or conservative growth estimates, or how the business might perform in an adverse market condition.
Actuals vs. Budget
Your budget sets the financial goals for where your business needs to be each month to meet projections. An outsourced CFO will use your actual financial data to calculate the variance between your budget and actual performance to help inform where you need to adjust your strategy to meet your targets.
Financial Reporting
An outsourced CFO can help you prepare for important meetings or financial events by creating reports, presentations, and other support you need. This can be extremely beneficial as you prepare for meetings with investors. The outsourced CFO can also help prepare key financial statements.
Strategic Planning
If you’re a founder new to the startup world, you may not have the financial expertise to make strategic decisions that could have consequences on expenses or revenue growth. An experienced outsourced CFO can help by advising you on strategies that can help you avoid these mistakes.
Customer Contract Reviews
An outsourced CFO can help you negotiate more profitable contracts with your customers. They can identify risks that could cost you money and make sure the contracts are watertight. The outsourced CFO can assess terms to ensure they are as favorable as possible and suggest ways to make them more profitable.
HR Oversight
Headcount is often the biggest expense for any startup, or really any company. An outsourced CFO can work collaboratively with the HR team to inform and monitor staffing decisions that could affect your ability to meet your budget. They can also advise on how to create compensation packages that are attractive but a good value for the business.
Ready for an Outsourced CFO?
If you are in the DC Metro area and are ready to take control of your startup’s financial organization, get in touch with the team at District Advisory. Our experienced professionals are available to provide your small to medium business with timely, consistent, and accurate advisory and CFO services. Contact the District Advisory team today.
