6 Reasons to Rent a CFO
Businesses come in a variety of sizes, from startup to millions (and even billions) of dollars in annual revenue. One thing that’s universal across all businesses, though, is their need for financial guidance to be successful.
But for a smaller company, bringing on a full-time financial leader just doesn’t make sense. That’s when the choice to rent a CFO is much more advantageous. Companies gain all the knowledge and guidance of a talented CFO without the large investment of adding a C-level employee to the team.
By Joel S. Smith
There are several reasons for a CEO to rent a CFO. Here are the top six:
1. Provide Financial Guidance
Perhaps the most important reason a company would rent a CFO is because of the financial guidance they provide. As a business edges up on $1 million in annual revenue, it needs more strategic support than it will often receive from a CPA or controller. A CFO helps to plan and forecast, develop fiscal structures, control costs, and create investment plans. Plus, since an outsourced CFO has a depth and breadth of experience, they’re able to provide you with a holistic, macro view of the company and the market to give you even better guidance.
2. Reduce Frustration
As a business owner, you have a lot on your plate, and you may not be as knowledgeable about how to drive the business forward from a financial standpoint. Bringing on a CFO as a consultant helps to reduce your frustration about this important aspect of business development. The right CFO acts as a coach, guide, and sounding board to help you make smart decisions to maximize effectiveness.
3. Ensure Tax Compliance
Another important reason to rent a CFO is to ensure the company is compliant with local, state, and federal tax requirements. This helps to mitigate risks through gathering the correct information and tracking it effectively. Often, that includes using an automated system, and a knowledgeable CFO will know exactly what platform works best for each business. Maintaining oversight of this information helps the CEO and CFO collaborate to examine trends in sales and marketing as well as how the business is driving revenue and creating brand awareness.
4. Shore Up Cash Flow
Most small businesses live and die by cash flow. CFOs help not only monitor but proactively manage cash flow and ensure that invoices are paid in a timely manner. They can also help to develop strategies to keep cash coming into the business moving forward.
5. Develop Reports for Investors and Board Members
Accurate reporting is essential for a business to thrive. When you rent a CFO, you bring on a financial leader who can set the tone for the company’s fiscal health. Your outsourced CFO gets your company’s financial plan on track and moving in the right direction so you can develop and measure key metrics. If you’re at a place where you would like to have onsite financial support, they can also help identify and manage a controller and bookkeeper who can manage and interpret data to share with investors and board members.
6. Create a Competitive Advantage
If you are in a saturated or highly competitive industry, you may choose to rent a CFO to provide you with a distinct advantage. Your experienced financial consultant will help identify opportunities to maximize production or expansion while slashing waste and better managing cash. They also have the unique vantage point of having worked with other businesses—in your industry and others—so they can incorporate that knowledge to help you. That all allows you to stay ahead of other companies in your niche.
Ready to Rent a CFO?
If you’re a small business owner who’s looking to make a big difference and move forward with purpose, it might be time to rent a CFO. JSS & Associates offers outsourced CFO services and is ready to help you make the right financial decisions. Contact us to learn more.