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    How an Outsourced CFO Can Help You Establish Accounting Practices To Minimize Risk and Maximize Profit

    Posted by Synergy Financial Services

    How an Outsourced CFO Can Help You Establish Accounting Practices To Minimize Risk and Maximize Profit

    Historically, business owners have assumed that an outsourced CFO was an expensive and often unnecessary investment for a small enterprise. In reality, today’s environment requires every small business owner to have true accounting and finance expertise on their team – and the outsourced model can make it cost-effective for companies of every size.

    How Can an Outsourced CFO Help My Business?

    Many small businesses don’t need a dedicated accounting department, and your accounting needs may not justify the expense of adding another full-time employee. Does this mean you should bring in a bookkeeper every month or two? If you want your business to thrive and grow, you’ll need more than just a few hours a month from a part-time bookkeeper. A bookkeeper can help you keep your records straight and your bills paid, but an outsourced CFO knows how to take those figures and optimize their potential for your business.

    An outsourced CFO can pair ideally with a small business because they can work closely with the bookkeeper — who manages receivables, payments, and payrolls — and act as the controller, who prepares financial statements and calculates profit margins. In addition to fulfilling this role, a CFO adds an even higher level of expertise, with services that can include:

    • Creating/updating budgets and forecasts
    • Developing top-tier financial strategies
    • Analyzing opportunities for profit
    • Developing lender relationships
    • Raising money for capital
    • Advising on investments
    • Providing accurate, up-to-date financial reports for board presentations
    • Advising on mergers and acquisitions

    As a full-service provider, an outsourced CFO specializes in reviewing and analyzing your entire financial situation, taking on the role of controller and advisor, while dealing with everything from receivables and payables to cash flow forecasts, ROI opportunities, and margin optimization.

    Outsourced CFOs and Fraud Protection

    In addition, outsourced CFOs are experienced in designing internal controls designed to detect and prevent fraud or embezzlement. 

    According to a report from software consultant TechJury, studies show that 95 percent of U.S. businesses have dealt with employee theft, which costs companies a staggering $50 million per year. And disturbingly, one study revealed that 75 percent of employees admit they’ve stolen from their workplace.

    The only way to mitigate employee fraud is to monitor risk potentials before they develop into theft, and that’s where an outsourced CFO can help. By establishing strategic accounting practices and protocols and regularly maintaining and reviewing them, a CFO can help minimize the risk of security breaches like fraud and embezzlement while maximizing profits. 

    Advantages of Hiring an Outsourced CFO

    An outsourced CFO can provide you with a full roster of financial management services, but on a schedule that’s customized to suit the needs of your company. When it comes to deciding when and how to select an outsourced CFO, here are four things to consider:

    1. An outsourced CFO has the same qualifications and expertise as a full-time CFO. 

    Outsourced CFOs have the same training and skills as their full-time colleagues, in fact, they often exceed those of in-house CFOs because many outsourced CFOs also practice as CPAs. This means that a well-suited outsourced CFO in most cases has completed more advanced training and licensure to support your business.

    1. Outsourced CFOs specialize in providing results quickly. 

    Because outsourced CFOs are accustomed to working in a wide variety of industries, they’re especially skilled at finding and implementing solutions quickly and efficiently. Their wide range of expertise gives them multiple networking resources, as well as versatile problem-solving skills that can benefit your company.

    1. An outsourced CFO is experienced in account management strategies from a wide variety of industries. 

    As an outside provider, an outsourced CFO will typically serve many clients simultaneously, which encourages them to be time-efficient and creative. Because of this range of experience, an outsourced CFO can potentially provide a broader scope and wider variety of financial management strategies for your business.

    1. An outsourced CFO can provide a more affordable option for your company. 

    Outsourced CFOs don’t require a full-time salary, insurance coverage, or other staff benefits or perks. Their fees are often set on an hourly basis, or for a specific project or retainer, depending upon what works best for your small business. That flexibility is ideal for fast-moving entrepreneurs.

    How Does an Outsourced CFO Analyze My Business? 

    By taking a big picture approach, an outsourced CFO can calculate the overall profitability of your business activities and determine how you can strategize those activities to increase profits and boost ROI. An outsourced CFO will take many factors into consideration, including these two essential questions:

    • Does your standard pricing strategy cover all of your monthly and yearly expenses?
    • Are there break-even points that provide enough profit for you to successfully invest in other essentials, such as infrastructure, personnel, or capital investments?

    Likewise, your company could be expanding operations, or you might be evaluating a new property purchase or rental, or considering new equipment. You might even be weighing the benefits of government contracting. These are just a few of the scenarios that an outsourced CFO can manage for you, no matter what type of industry you’re in.

    Ultimately, an outsourced CFO can help businesses establish solid, top-tier accounting practices that will keep finances healthy and thriving. Additionally, an outsourced CFO can ensure that these practices and protocols are regularly reviewed and consistently maintained to their highest level to maximize profits and protect against fraud.

    If you own or operate a small business in or near Washington, D.C. and you’re ready to take your growth to the next level, Lagerquist Accounting and Advisory can help. We provide a full roster of comprehensive accounting and financial consulting services that can help your company succeed and thrive. Contact our team to find out how we can provide you with the financial skills you need to achieve your business goals

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