What Outsourced CFOs Provide for CEOs

Outsourced CFOs work as an extension of your team to manage the business’s finances, provide strategic direction, and promote growth. 

While they have their own set of important tasks, they also work closely with the CEO to provide the financial insight needed to make decisions, large and small. 

As the business grows, their professional dependence on each other grows as well. Here are some of the areas in which an outsourced CFO will benefit a CEO. 

Metrics Management

One of the primary tasks of a CFO is collecting relevant data and analyzing the performance of that data. 

While most businesses track standard reporting KPIs (Key Performance Indicators), like gross profit, budget variance, and customer acquisition cost, they also need to track metrics that are specific to their own unique needs. 

Outsourced CFOs create tracking strategies to ensure your business collects and relays the information it needs to make strong decisions moving forward.  

Along with managing the standard and unique KPIs previously mentioned, CFOs are also responsible for managing cash flow. A healthy cash flow is an indication of a healthy business, so proper management and reporting are vital.

Once the data is collected and reports have been made, outsourced CFOs present the information to the CEO in an easy-to-understand format. Together, they will strategize to create a plan to get the numbers to match the goals and needs of the business. 

Financial Planning and Budgeting

For a business to grow, it has to spend time preparing for the future and in most cases, this can be done through financial planning and budgeting. These tools use a combination of previous data and forecasts to develop strategies for how and when money should be allocated to reach business goals. 

Financial planning and budgeting require a combined effort from the CFO and the CEO. While the CEO knows where money needs to be allocated and is much more fluent with the overarching goals of the business, the CFO knows how to manage that money to produce the financial results that help the business reach its goals.  

Once the tools are created, the CEO will spend their time implementing the financial plans and budget, while the outsourced CFO keeps a close eye on the metrics, measure progress, and suggest changes where needed. 

Systems and Processes Management and Upkeep

Building the financial processes your business needs requires plenty of planning and attention to detail. What may start as shifting from manual processes to automation (or simply improving previously automated processes) may lead to the need to build out a perfectly integrated tech stack. 

This can be a tricky process and more times than not, it’s something a CEO doesn’t have time for. However, a CFO, working closely with the CEO to define goals and strategies, can take the time to do the necessary building and implementation of these processes. 

They understand the technology and systems and can select third-party applications that work well with what you currently have in place, smoothing out the integration process and building a high-performing tech stack.

Strategizing Long-Term Growth Plans

CEOs are responsible for creating long-term strategies that further the business. Some examples of these strategies include: 

• Product development and pricing
• Adding a new branch
• Planning a rate to hire employees
• Etc. 

However, before implementing these strategies there are plenty of financial aspects to take into account. This is why it’s essential the CEO and outsourced CFO work closely together.

While the CEO brings the ideas and methods for implementing long-term strategies, the CFO works on the financial aspects like market analysis, pricing analysis, studying growth rates, economic impacts, and more. Working together helps to create the most sound strategies to forward your business. 

Decision Making

In addition to long-term strategizing, CEOs are also responsible for making day-to-day decisions. While it may seem like the short-term decisions don’t carry as much weight in the moment, they absolutely play a role in the overall success of the business. 

There are almost always financial implications associated with these daily decisions and a CFO is responsible for providing guidance in this area. 

They also play an essential role in determining if the short-term decisions being made align with goals and the long-term plans for the business. 

Outsourced CFOs Partner with CEOs to Enhance Business

As the outsourced CFO works to manage metrics, create growth-focused financial plans and a budget, select and manage the upkeep of systems and processes, strategize long-term plans, and aid in decision making, it’s essential to work closely with the CEO. 

While an outsourced CFO is not in the office, their relationship with the CEO still requires the same levels of trust and communication. Together, their skills will go hand and hand to improve the business as a whole.  

For more information about how outsourced CFOs and CEOs work together to create a thriving business, visit: https://www.novaa.ca/