In a fast-paced, highly competitive business environment, startups will require all the help they can get to survive and upscale. Outsourcing is an excellent business strategy for startups as it allows them to do more with their limited resources to focus on improving their core activities.
One area to outsource, where founders can highly benefit, is finance. Whether a startup is in its early or growth stage, having access to a CFO with high-level financial expertise and strong business acumen can give companies a greater chance of growing.
In this article, we compiled a list of outsourced CFO services so you can identify what functions you can benefit from and help accelerate your startup.
Financial Projections
Financial projections are critical to startups as they show founders how the business will perform in the near future. Forecasts are also crucial for investors as they indicate if the business will grow and become profitable. They also serve as the foundation of a company’s budget, reflecting the amount of investment the business requires.
A CFO will look at the startup’s previous financial outcomes and project the performance of the business in the future. The CFO will forecast possible expenses and revenues and adjusts projections regularly.
Expert Guidance
With an experienced CFO in your team, you have access to a high-level advisor who can guide you through the various processes of establishing and growing a startup, including securing funding.
Scenario Modelling
Businesses need to plan for various possible outcomes; however, this is time-consuming and requires expertise. An outsourced CFO can help you project likely future events and develop alternative projections showing how the startup will perform under these scenarios.
Reporting and Financial Presentation
CFO services will include preparing financial reporting for the Board or Management team and, in some instances, will consist of attendance at these meetings. Your outsourced CFO will inform board members of potential surprises and answer follow-up questions. Even if the CFO isn’t attending these meetings, they can help your team identify critical figures and help you explain their impact on the business.
Budgeted and Actual Financial Data
Budgets are essential to businesses as they help set accurate goals, place spending caps, and identify where funding originates and what strategies can help generate revenue. However, budgets are only adequate if you review them regularly; this is where a CFO can help. The CFO will look at actual financial data, compare it to the budget, and prepare a report on whether the startup is on track or is falling short of sticking to its budget.
If you’re aiming to seek funding, potential investors and lenders will be interested to see if you have strong budgeting practices. A history of detailed budgets and evidence that you are keeping within the set parameters will help you gain the financing required.
Strategic Planning
Founders still learning the ropes in the startup world may risk making strategic decisions that can adversely affect the business’s financial health. A seasoned CFO specialising in startups can help mitigate these mistakes by offering financial and business strategies that are proven to work.
Schedule a free consultation with us today if you want to know more about how your startup can benefit from outsourced CFO services.