AI for Accounting and Finance Blog

One of your first jobs as a fractional CFO will be to understand the inflows and outflows of the organization. But what lies behind your client’s revenue and expenses? In a word, contracts. The business world no longer runs on handshakes, but on lengthy, complex, written documents that you should review.

Whether you’ve just started as an outsourced CFO or you’re an old pro, you’ll always find a fresh perspective by interacting with your client’s business partners. Insurance brokers, bankers, and vendors can provide a unique viewpoint that is hard to find inside your client’s office. 

The balance sheet contains a wealth of information and tells a story about your client’s business. But are your clients looking at the story behind the numbers? Accounts receivable, inventory, and other assets and liabilities will paint a picture of what’s going well - and what hidden factors need addressing.

Labor is typically the largest expense for a business, often comprising between 50% to 70% of the company's budget. Unless you validate current wages, time and attendance, and market comparisons, your client’s company may be paying more than necessary.

It’s important to live in the moment, but successful companies must also predict their future. A fractional CFO is a valuable asset to any management team that depends on a sound forecast to make critical business decisions for the next quarter, year, and beyond.

Profitability is just one of the many goals of a successful business. But even the best CEO may be in the dark when it comes to knowing if their business is sailing along - or quietly sinking. That’s why an outsourced CFO can be a valuable asset to a management team.

In a recent webinar, Top 10 Outsourced CFO Quick Wins, we asked owners of accounting firms about the cash flow status of their clients. Nearly 75% said their clients had so-so cash flow, 17% were flush, and 9% were an accident waiting to happen.  These results echoed a common theme: businesses have a hard time managing cash and lack understanding of their dynamics.

If you’re an Outsourced CFO or are considering it, you know that you have responsibility for more than just the numbers. You also need to understand the story those numbers tell about the business. Financial statements are the primary means of communicating financial results to executives, stakeholders, and investors. So you must take a deep dive into what’s behind the numbers.

The Outsourced CFO as Superhero

A fractional or outsourced CFO has a particularly challenging job. They are often tasked with saving a company from financial horrors (instantaneously) while simultaneously creating trusted relationships with company leaders and employees. In short, they are asked to do one thing: become a superhero.

Superheros have special qualities. They can see what’s wrong and fix it. They can quickly identify who is an ally, fan, or enemy. And they use those powers to create miracles and long-lasting influence.

To help you be a successful outsourced CFO superhero, you’ll need to find your allies starting the first day on the job. Here’s who you should meet, find common ground, and partner with to solve strategic problems.

The Need for Outsourced CFO Services

In a recent webinar, we asked how many of our attendees if they offered Outsourced CFO services as an extension to their accounting services.  An astounding 97% offered fully outsourced or similar CFO services. Why is the role of outsourced CFO so popular and needed among today’s mid-sized businesses?

According to Payscale.com, the median salary for a CFO is over $132,000.  Add in employee benefits, bonuses, and 401(k) contributions, and you’ll soon see why small to mid-size companies might struggle to bring on such a highly paid expert and still pay the bills. In addition, a leading recruiting firm, Korn Ferry, estimates that the average CFO tenure is 5.1 years, leading to high turnover that can derail a growing company.