Your business is growing and it has become clear that, in order to protect your company’s health, it’s time to wear one less hat. As a small business owner, it can be a challenge to give up control over accounting and financial reporting. With the right CFO services provider, it won’t be such a difficult obstacle to overcome.
How do you find the right provider? You may begin by asking for recommendations from colleagues, but there are some steps you will want to take to be sure it will be a rewarding partnership that equips you for growth.
First, consider your reasons for outsourcing. Are you wanting to free up some of your time, save resources or improve the quality of your financial reporting? These are all valid reasons for outsourcing, and identifying your priority may help you narrow down your choices.
As you evaluate potential CFO services providers, ask the following questions:
What Can I Expect in Terms of Communication?
You will have scheduled meetings and performance reviews, but what is the provider’s availability aside from built-in opportunities to discuss your finances? You may have opportunities or challenges come up and you will want to know how quickly you should be able to get insight from your service partner.
In addition, what format of communication does the potential provider utilize? Find out whether the company you are considering embraces the kinds of technology your team is comfortable using.
How Does Flexibility Fit With my Contract?
One of the benefits of outsourcing is the scalability it brings to a business. You pay for the number of hours of CFO services you require. As your business changes, you may find that you have a surge in accounting needs or that a market change in your industry is causing a slowing of your volume.
Talk with any potential partner about how they handle fluctuations in services while maintaining the expected level of quality and responsiveness.
What Expertise do you Have in my Industry?
Your CFO services provider should be able to talk about clients that share some similarities with your business. If they haven’t worked in your particular industry, have they seen similar business models or size of businesses? Financial reporting is a uniform process, but decision-making is unique to your business, so you will want a CFO who can give you insights based on experience and expertise.
In a somewhat related consideration, you will want to establish a partnership with a CFO that introduces complementary skills. You may have an in-house accountant or bookkeeper, so think about what kinds of specific areas of expertise would be beneficial to your business.
What is the Average Tenure of Your Client Relationships?
A good CFO services provider will be able to demonstrate their success supporting businesses like yours simply by showing that their clients have not switched CFOs. In a service that relies heavily on performance and trustworthiness, you need to see evidence of reliability.
Of course, there are caveats and exceptions in a lot of outsourcing situations. A CFO services provider may have a lot of experience helping businesses grow until they require an in-house team.
How do you Measure Success?
If you circle back to the priorities you identified for outsourcing, you will likely have some metrics established for assessing whether CFO services are meeting your expectations. Make sure there are agreed-upon objectives and corresponding metrics so that you know how effective your outsourcing partner is at equipping your business.
Your partnership should be with a services provider who has a vision for long-term growth for both their company and yours.
How Does Your Company Culture Align With Ours?
This can encompass a wide range of areas, including their passion for what your company does, their tolerance for unfinished work and whether they will answer your call after hours. Make sure you pay a visit to a potential CFO services partner before you make a decision. Look for evidence of a strong work ethic among employees, as well as signs that they enjoy being there at work.
What’s Your Approach to Data Security?
Determine whether the CFO services provider you are considering has an approach to data security and disaster recovery that aligns well with yours. How do they protect client data, and who is responsible for the security of data-in-transit? What is their approach to network access security?
These seven questions will help you evaluate the best options for a CFO services provider, but you may want to dig a little deeper. There are a few additional steps you may want to take in your decision-making process:
Talk With Existing Clients. Find out whether the CFO services provider produces financial reports in the time expected, as well as how well they adhere to the budget and the level of responsiveness they receive.
Examine Compliance: Establish whether the services provider meets industry requirements and certifications for adherence to regulations.
Address Legal Considerations: Address issues like intellectual property rights and confidentiality requirements for services providers.
Evaluate Technology: How does the CFO services provider handle their approach to technology? Are they forward-thinking, embracing automation and time-saving features and tools, or are they reluctant to implement new solutions?
Implement Feedback Scheduling: A good outsourcing partner welcomes feedback from their clients and is constantly striving for good relationships. Determine how often feedback in the form of performance reviews or other opportunities will occur.
For many companies, the decision to outsource CFO services is exactly what is needed to drive growth. The Power CFO is here to help you improve efficiency and increase your bottom-line profit. With our fractional approach to services, you can access part-time CFO service or utilize our help as needed. We offer bookkeeping, controller and CFO services to fit your business needs.
But don’t take our word for it. Use this list of questions to evaluate us against other options in the industry. We’re confident our record and services speak for themselves. Contact us today at The Power CFO to learn more.
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