A small business owner needs to pay attention and execute essential business processes with utmost sincerity. Small business owners often wonder whether it is right to consider CFO services for their business since every business needs an expert to look after its financial management. A solid financial structure forms the bedrock of the overall system of an organisation. For small businesses, there is so much on the plate that it is impossible to manage all the business aspects. So, it is pretty difficult for small businesses to pay equal attention to the financial system. But as mentioned, a solid financial base attracts financial stability and business growth in the foreseeable future. To tackle the financial challenges, a small business should utilise CFO services. CFO services for small businesses provide invaluable insights into financial management. Not just the financial part, a CFO helps a small business by offering expert advice on strategic management.
Certainly, a CFO strengthens the financial structure, financial planning, financial reporting, cash flow management, etc. But the growing businesses lack sufficient funds and capital to bear the expense of a CFO. Apart from the monthly remuneration, a full-time CFO also demands additional employee expenses. A small business cannot cater to the financial needs of an expensive full-time CFO. Thus, it is beneficial to resort to outsourced CFO services to achieve financial stability with cost savings. Every business needs financial expertise to meet its future priorities, and outsourced CFO services can be a great alternative. But small businesses often face difficulty in choosing in-house or outsourced CFO services. SMEs owners are often doubtful about outsourced CFO services' quality, reliability and trustworthiness. Thus, it is essential to distinguish between outsourced and in-house CFO services for small businesses. Let us list certain parameters to compare in-house and outsourced CFO services
- Expertise- The rapid changes in business call for expert financial management. With expert financial management comes financial leadership. A full-time CFO would provide expertise and share the burden of the finance function, but it comes with a huge cost. Along with salary, the additional employee benefits overburden the SMEs. On the other hand, outsourced CFO services eliminate the need for additional employee expenses. The finance professionals provide accurate, consistent and timely financial information.
- Factor of security- The entire control of finance function in the hands of a small team increases risk. This makes businesses more vulnerable to fraud. But with outsourced CFO services, a dedicated team of professionals provide accurate and timely information. They provide honest data reporting and analysis because their market position is also at stake.
- Convenience- The cost and convenience attract businesses toward a particular service. A full-time CFO requires high maintenance and lacks flexibility as well. With outsourced CFO services, the businesses gain cost-effectiveness along with convenience.
- Core activities- Hiring in-house CFOs requires business owners to get involved with them. However, outsourced CFO services guide the business owners in navigating the accounting complexities of their organisation. The virtual or outsourced CFO services enable businesses to concentrate on their core activities and leave the rest. In this way, SMEs can entirely focus on major business activities and increase business productivity.
The above points can be considered to choosing between in-house or outsourced CFO services. CFO services for small businesses enable businesses to gain a competitive advantage in a highly competitive environment. In the initial stages of a business, an organisation can choose to avoid financial management, but with increased complexities, it is better to choose CFO services. In the same way, SMEs can choose to go for virtual bookkeeping services or outsourced bookkeeping services to enhance their business records. Accurate books ensure transparency and build confidence among business owners.
