An Outsourced CFO Might Solve a Familiar Quandary

Why an Outsourced CFO?

It’s a familiar quandary for small- and medium-sized businesses (SMEs) across the country: balancing the critical need for a skilled chief financial officer with limited resources.

Many SMEs, however, would do well to consider the practical — and strategically advantageous — alternative of an outsourced CFO.

According to the Wall Street Journal, annual salaries for CFOs frequently top six figures — the Boston, Massachusetts, market, of course, is consistently at the high end of the pay scale. And, as Ashleigh Swayn, CEO of Countplus MBT, notes in a recent blog post, “It’s not just the CFO’s salary that you have to account for. It’s also the overheads like payroll taxes, retirement plans, and other benefits paid to full-time employees. Indeed, these overheads can cost up to 30 percent of the salary in addition to the salary itself.”

Cost isn’t the only consideration, though.

SMEs often find that a “rented” CFO brings a more objective viewpoint to company finances, which can result in sharper strategies.

The Journal’s report, for example, cites the story of Ruthann P. Lacey, who owns a law practice in Georgia.

Before bringing in an outsourced CFO, an office manager handled the firm’s bookkeeping and Lacey’s husband filled in with financial and tax-preparation advice.

Following the CFO’s advice, Lacey installed QuickBooks software, hired an accountant and brought the company’s accounts receivable system up to date.

“This is something I should have done a long time ago,” she says in the article.

An outsourced CFO can bring direction, framework and sophistication at a fraction of the cost of a full-time executive.

“As an outsourced function, you can manage the cost as a monthly operating expenditure,” Swayn adds, “and you’re not exposed to staff turnover, recruitment costs, or management costs.

“But you will have help with evaluating strategic business opportunities for growth as well as expertise in handling the monthly accounts.”

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