You invest in your business to benefit the strength and growth of your company, and deciding how to staff financial responsibilities is one of the more critical investments you’ll make. Hiring in-house comes with certain advantages, but before you write your job description or wanted ad, there are key reasons to consider outsourcing your CFO services.
The Costs You’ve Considered
While outsourcing CFO services may be a solution for covering a gap while you search for a permanent replacement, you may want to think of it as a better permanent solution. If you assume a $175,000 annual salary, you’ll need to quickly tack on a few more costs:
· The recruiter will claim 20% of your new hire’s annual salary: Add $35,000.
· The time you spend reviewing resumes and interviewing, at $500 per day for a manager’s salary, will require about $2,500 at a minimum.
· Don’t forget benefits at 20-30% of the annual salary, so at least $35,000.
You haven’t even gotten to training and onboarding costs, plus equipment and the physical space where they will work. But you’ve likely considered all of this. It’s in your calculations and you believe that the control and convenience of having someone in-house to perform CFO duties is valuable.
The Costs You May Not Have Considered
Unfortunately, what’s listed above is just the beginning. Let’s dive into some of the costs that come with an in-house CFO versus outsourcing CFO services.
Network: When it’s time to secure a new investor or apply for a business loan, your outsourced CFO will be invaluable. They’ll have broad experience working with other business owners and will know where your best possibilities are. They will also have an extensive network, providing access to investors that you may otherwise not have considered.
Scalability: Once you hire an in-house CFO, you are locked in with the associated expenses. When you work with an outsourced CFO, you have a lot of flexibility in using their services. They can help with a merger or acquisition; help you work through an efficiency study or determine the right path for an expansion. When you need to scale back on services, it’s easy to make adjustments.
Objectivity: Bias can be hard to recognize in yourself or in your employees. A CFO that isn’t a part of your internal team will offer objective advice and insights based on extensive experience in your industry and across others. An in-house CFO can sometimes be swayed by a variety of subjective concerns that make it more challenging to determine a clear path.
At The Power CFO, we offer outsourced CFO services in a fractional model. This allows you to obtain the help you need to drive growth, improve efficiency and make informed business decisions. We would love the chance to hear about your business and see if there’s an opportunity for us to work together. Contact The Power CFO to get started with a cup of coffee and a conversation!
Comments