MGO CPA | Tax, Audit, and Consulting Services

Topic: Outsourced Accounting

How an Outsourced CFO Can Benefit Your Business

  • Outsourced CFO services provide part-time or as-needed financial guidance, making it an ideal solution for businesses that don’t require a full-time executive.
  • An Outsourced CFO provides services tailored to meet your needs, bringing a wealth of experience and proficiency from different industries.
  • By quickly integrating into your business, an outsourced CFO eliminates the need for a lengthy executive search and onboarding process.

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A chief financial officer (CFO) is an essential role in growing companies. They lead the company’s financial function, partner with the CEO to maximize value creation, help shape investment and financing decisions, and communicate with key stakeholders.

However, not all businesses — especially startups and those in the middle market — have the resources to appoint a full-time CFO.

Fortunately, outsourced CFO services provide a flexible, cost-effective, and results-driven alternative for businesses seeking top-tier financial strategic oversight without the permanent overhead of a full-time executive.

What Is an Outsourced CFO?

An outsourced CFO can bring a wealth of diverse knowledge to your business. They function much like a traditional CFO but on a flexible, often part-time basis.

Outsourcing this role is particularly valuable to small businesses, startups, or mid-sized enterprises that do not require — or cannot afford — a full-time CFO.

The services offered by an outsourced CFO depend on your needs but might include:

  • Strategic financial planning and analysis
  • Financial forecasting and budgeting
  • Cash flow management
  • Presenting financial data to boards of directors, investors, lenders, and other decision-makers
  • Evaluating the company’s strengths and weaknesses, and offering suggestions for improvement
  • Helping assess the viability and potential return on investment (ROI) of new products or markets
  • Analyzing pricing and cost structures to improve profit margins
  • Assisting with raising capital or securing financing
  • Helping a company navigate a financial restructuring

You can tap an outsourced CFO to provide routine financial advice and oversight or to lead specific projects. They adapt to your business’s precise needs.

Why Hire an Outsourced CFO?

Hiring an outsourced CFO brings a range of benefits. Here are some of the benefits you can expect to gain:

Cost efficiency and flexibility

Hiring a full-time CFO is expensive. According to Salary.com, the salary for a CFO in the U.S. is between $334,103 and $565,829, depending on education, experience, and credentials. That figure doesn’t include bonuses or benefits.

If you have a startup or small- to medium-sized enterprise operating with a limited budget, that level of investment is usually not feasible or even necessary.

An outsourced CFO enables you to get the financial experience, knowledge, and leadership you need, when you need it. This piecemeal approach helps manage costs and provides the flexibility to scale up or down based on your requirements.

Access to strategic advice

Outsourced CFOs bring a broad spectrum of experience and knowledge gained from working across various industries and business models.

A CFO who has only worked in manufacturing might have a tough time adapting to the unique opportunities and challenges a company faces in the real estate, technology, or hospitality industry. On the other hand, an outsourced CFO may have worked with companies across multiple industries. This diverse perspective makes them well-equipped to handle challenges and offer insights that internal resources may lack.

Additionally, if an outsourced CFO encounters a specific issue, they can tap into a wider network of professionals in their firm — from tax professionals to industry-specialized practitioners. This offers a more robust and informed service than you get from an in-house financial executive.

Seamless integration and strategic development

Integrating an outsourced CFO into your business is usually swift, so you can bypass the lengthy recruitment and onboarding process of hiring a full-time CFO.

Your outsourced CFO provides immediate access to financial ability, which is crucial if you face urgent strategic decisions or complex financial challenges.

In fact, we have worked with many companies who initially engaged us on an interim basis while they searched for a full-time CFO. Often, they find the arrangement so beneficial it becomes a long-term strategy.

Comparing Outsourced Versus In-House CFOs

An outsourced CFO can be a strategic partner to help you shape financial strategy, develop your internal teams, and streamline operations. However, they may not be the right solution in every situation.

Here is a look at the difference between an outsourced and an in-house CFO so you can decide which category of financial executive you need:

Many of our clients develop strong, ongoing relationships with their outsourced CFO and find they provide a level of service that closely mirrors that of an in-house CFO. 

Experience the Outsourced CFO Advantage 

An outsourced CFO offers a strategic advantage that is both cost-effective and rich in knowledge. Opting to outsource this critical role enables you to focus more on your core strategic areas while ensuring your accounting and finance functions receive the oversight and attention they deserve. 

How We Can Help 

To learn more about how our outsourced CFO services can benefit your organization, contact MGO today. We are happy to discuss how we can provide a tailored approach that aligns closely with your financial goals and operational needs. 

Five Reasons Private Companies Should Adopt Public Controls

Often viewed as a “public company problem,” private organizations may want to consider implementing internal controls similar to Sarbanes-Oxley (SOX) Section 404 requirements. The inherent benefits of a strong control environment may be of significant value to a private company by providing: enhanced accountability throughout the organization, reduced risk of fraud, improved processes and financial reporting, and more effective inclusion of the Board of Directors.

Private organizations, while not always smaller, often have limited resources in specialty areas, including accounting for income tax. This resource constraint —the work being done outside the core accounting team — combined with the complexity of the issues, means private companies are ideal candidates for, and can achieve significant benefit from, internal controls enhancements. Thinking beyond the present, the following are five reasons private companies may want to adopt public-company-level controls:

1. Future Initial Public Offering (IPO) – Walk before you run! If the company believes an IPO may be in its future, it’s better to “practice” before the company is required to be SOX compliant. A phased approach to implementation can drive important changes in company culture as it prepares to become a public organization. Recently published reports analyzing IPO activity reveal that material weaknesses reported by public companies were disproportionately attributable to recent IPO companies. Making a rapid change to SOX compliance can place a heavy burden on a newly public company.


2. Merger and Acquisition Deals – If the possibility of the company being sold to an M&A deal exists, enhanced financial reporting controls can provide the potential buyer with an added layer of security or comfort regarding the financial position of the company. Further, if the acquiring firm has an exit strategy that involves an IPO, the requirement for strong internal controls may be on the horizon.


3. Rapid Growth – Private companies that are growing rapidly, either organically or through acquisition, are susceptible to errors and fraud. The sophistication of these organizations often outpaces the skills and capacity of their support functions, including accounting, finance, and tax. Standard processes with preventive and detective controls can mitigate the risk that comes with rapid growth.


4. Assurance for Private Investors and Banks – Many users other than public shareholders may rely on financial information. The added security and accountability of having controls in place is a benefit to these users, as the enhanced credibility may impact the cost of borrowing for the organization.


5. Peer-Focused Industries – While not all industries are peer-focused, some place significant weight on the leading practices of their peers. Further, some industries require enhanced levels of security and control. For example, cannabis companies with a heavy regulatory burden, industries with sensitive customer data like lifesciences, and tech companies that handle customer data, often look to their peer group for leading practices, including their control environment. When the peer group is a mix of public and private companies, the private company can benefit from keeping pace with the leading practices of their public peers.

Private companies are not immune from the intense scrutiny of numerous stakeholders over accountability and risk. Companies with a clear understanding of the inherent risks that come from negligible accounting practices demonstrate their ability to think beyond the present, and to be better prepared for future growth or change in ownership.