The average median salary for a CFO in the USA is $519,692 per annum. That’s more than half a million dollars spent each year on just hiring a single resource in the firm. So is it worth it? Yes! CFOs are integral to business functioning since they not just help the firm in their day to day operational tasks related to F&A functions like making financial reports, they also provide the firm with actionable business data through crunching of important numbers and reports that can be used to make important business decisions related to future investing related matters.
But, what if you can get the same or even an improved level of services for a fraction of this cost? Won’t it be sound like a highly enticing scenario to you as a business owner? Because, after all, as a business owner, your basic purpose is to minimize the costs as much as you can while still maintaining the quality of work produced. This proposition has changed the way businesses are now looking at the idea of hiring an in-house CFO for their F&A tasks.
Nowadays, with the rise in the number of providers in the outsourced CFO industry, businesses are shunning the conventional model of hiring a full-time resource, because the former provides them with an incredible amount of savings on the cost front, but is it just the only thing that is influencing this decision? Definitely not!
Hiring full time, in-house CFO has stopped making a lot of business sense in today’s times, and as a business, who is currently tinkering with the idea of acquiring the services of a CFO, you need to know why exactly that is so.
To make things clear for you, here are some solid reasons as to why you shouldn’t be opting for a full time, in-house CFO over outsourced CFO services.
Onboarding and Maintenance Costs:
As a business owner, you must know the fact that the salary is not the only expense that a business accrues when it hires an in-house resource. The same goes in the case of hiring a full-time CFO as well.
When you get an in-house CFO, apart from the salary, you will have to bear a high amount of additional costs that can make the total cost of a CFO go way overboard than what you can accommodate.
For e.g. a CFO will need a wide amount of niche-specific tools to get the tasks at hand done in the right manner like Quickbooks. These tools come at a high cost to a business and when you have an in-house CFO, it is you who will have to bear the costs of these tools as well. On top of this, you will also have to provide the CFO with some sort of a functioning team comprising of three to four people at the bare minimum so that it can complete its tasks in time.
When you opt for an outsourced CFO Service, the onus of these costs is not on you but on the service provider itself. You just have to pay for the services you acquire, either by the hour or on a weekly or custom basis, with all other costs countered in. Surely, this will be much cheaper for you than hiring a full-time CFO onboard.
Grappling With Turnover Issues:
When you hire an in-house CFO, it can leave the job at any time, leaving you in a rut with a lot of tasks pending. Apart from this, when this CFO leaves, you will have to start the recruitment process all over again, bearing all the costs associated with it all over again. Additionally, when the new CFO comes on-board, it will take a substantial amount of time to settle down and understand what’s required of it before it can get on with things.
Doesn’t this seem like a very problematic process that you shouldn’t be suffering from as a business? Definitely yes! So what’s the turnaround to this? It’s easy. Hire an outsourced CFO Service onboard to handle your F&A tasks.
This way, you will ensure that you never have to face the prospect of a CFO leaving its position from your business, since outsourced CFO Service providers have an integrated network of professionals to provide you the required services. So if one of them leaves, the outsourced CFO Service provider has a lot of other resources that it can easily bank on, ensuring much-needed business continuity.
Access To A Wide Network Of Industry Contacts:
A full-time CFO, no matter how qualified or experienced, is just one single resource at the end of the day and it can manage only so much. Access to industry contacts like investors, accounting professionals and other types of business experts is not something that will be on the priority list of this full-time CFO since firstly, it has a lot of tasks to complete leaving little time for anything else and secondly, it’s fixated in just one location which limits its chances of building and nurturing a truly global contact network.
On the other hand, outsourced CFO services have a high amount of CFOs that work with from different locations from across the globe, so it’s only natural that they have a far better and more diversified reach to such highly important people in the business world across the globe.
Leveraging these contacts can help your business grow substantially by finding investors for new projects you are undertaking, providing consultation services for important business decisions and being aware of all the latest developments and trends in the industry.
If you are managing a small business that wants to grow fast, you need to ensure that there are virtually zero bottlenecks in any of your business requirements and as is evident from the issues shared above, hiring a full-time CFO will not help you achieve this aim quite easily.
In today’s world, hiring a full-time CFO has stopped making a lot of business sense, especially in the face of such stifling competition, so now the decision is yours. In the face of such overwhelming evidence, it should be quite clear to you that the best decision for your business is to opt for an outsourced CFO Service provider for leveraging important business continuity.