Accounting & Finance

How outsourced CFO services can help your business grow

  • 4 min Read
  • July 20, 2021

Author

Escalon

Table of Contents

Being neither steady nor stable, the financial operations and needs of startups and early-stage small businesses can be complex and time-consuming. And without having someone dedicated to managing the resources and overseeing these responsibilities, it is likely that they get into financial trouble.

 

That’s where a chief financial officer, or CFO, comes in — driving your finances up and right. But hiring a full-time CFO may not be viable for such bite-sized businesses; this is where outsourcing the role can help.

 

An outsourced CFO gives you access to the right expertise to support your business without compromising on its bottom line or having to arrange additional infrastructure to maintain the position as a full-time role.

 

Here’s how outsourcing CFO services can steer your business to success and stability.

 

Managing cash flow




 

Funding runway constitutes a major challenge for startups — that is having enough money in place to manage to their next round of funding. In fact, struggling with high costs and low to nil revenues, most of them are likely to blow through their entire initial capital way before establishing a market presence. This is where a fractional CFO can help.

 

Acting as the steward of resources, CFO can help in managing expenditures and preventing costs from getting out of hand, hereby making sure there’s money in the bank and the firm stays solvent during its most challenging early years.

 

Developing strategies




 

Offering new insights, financial data can help improve cost accounting, better understand consumer behavior and much more. Owing to the increased use of data analytics in businesses, the role of the CFO is quickly expanding to include being a business strategy adviser.

 

Gleaning the rich data collection, CFO can help comprehend the available metrics in the right manner and develop data-driven powerful strategies that can help businesses compete better with their peers.

 

Guiding funding




 

To move to the next level, startups need ample money. This process usually involves approaching venture capital firms and trying to secure Series A and gradually Series B funding.

 

The CFO plays a vital role in getting the company ready to raise capital. They can help manage the due diligence, financial planning and get necessary KPIs in order. Additionally, they can help spend that money wisely so that the funding received has the greatest impact on the business.

 

Grabbing new opportunities




 

The CFO is the visionary for your company. They find ways to say “yes” to new business opportunities. If they can’t devise an action plan or timeline, they will help you devise alternative approaches so that your business achieves the desired result.

 

Building efficient infrastructure




 

By helping build a strong foundation, the CFO can prepare a startup to successfully handle changing business conditions as it grows.

 

For example, if the customer base swells a hundredfold, a lack of adequate financial systems to handle that increased demand can put the business at risk of losing momentum and customers. This is where an experienced CFO can step in and institute scalability in almost every aspect of the business including payment processing, payroll operations, human resources, accounting systems.

 

Prepping for the next stage




 

Provided the business doesn’t fail, over time a startup matures and may plan expansion, issue an IPO, merge or get bought out.

 

Part of a CFO’s role is to prepare the early-stage business for eventualities and ensure a smooth transition. For example, while going public, they chalk out an action plan outlining the steps in detail for businesses, from hiring investment bankers, underwriting, to filings, announcements.

 

The CFO also helps you make the best decision as you get ready to expand. For example, which markets you should target while expanding internationally, and what kind of return can you expect? They can also assess when you may need to hire more staff.

 

Or, in case you are planning to invest in a new venture, the outsourced CFO can advise when and how much to invest, and when to double down or pull back. By modeling all the possible outcomes of the expansion/investment, they can help you understand the pros and cons of your plan before going ahead.

 

Talk to our team today to learn how Escalon can help take your company to the next level.

  • Expertise you can trust

    Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.

  • Quality and consistency

    Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.

  • Scalability and Flexibility

    Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.

Contact Us Today!

Tap into the latest insights from experts in your industry

Taxes

How to Maximize Your Tax Deductions: Essential Tips for Startups in Q2

Tax season often triggers stress and complexity—especially for startups laser-focused on building products, acquiring customers, and scaling operations. Yet savvy...

Read More
Startups

Mid-Year Financial Checkup: How to Assess and Adjust Your Startup’s Budget 

The halfway mark of any given year is more than just a date on the calendar; it’s a valuable checkpoint...

Read More
Consumer Goods

Inventory Accounting 101: Navigating Costing Methods and Their Impact on Financial Health 

For consumer goods companies, managing inventory efficiently is critical—not just for operations but also for financial health and risk management....

Read More
Technology & Security

Compliance Considerations for SaaS: Protecting Data and Staying Secure

As more businesses transition to Software-as-a-Service (SaaS) solutions, data security and regulatory compliance have become top priorities. From handling sensitive...

Read More
Accounting & Finance

How Outsourced Accounting Supports Scalability in Portfolio Companies 

For portfolio companies, whether backed by private equity, venture capital, or family offices, scalability is essential for maximizing value and...

Read More
Consumer Goods

Insights from a Consumer Goods Expert: Building Brands, Inventory Management, and the Power of Outsourcing

Insights from a Consumer Goods Expert: Building Brands, Inventory Management, and the Power of Outsourcing  In a recent conversation with...

Read More
Private Equity

The Key to Private Equity Success: Strong Financial Oversight and Compliance

Private equity deals are becoming larger and more complex, making financial preparation a critical part of the process. Take Novartis’s...

Read More
Accounting & Finance

Navigating Grant Management and Financial Reporting for Biotech Startups 

Biotech startups operate in a unique financial landscape, where securing grants, venture capital, and government funding is crucial for driving...

Read More
Accounting & Finance

Financial Compliance in the Decentralized Era: What Web3 Startups Need to Know 

As the world leans into the decentralized era, Web3 startups are at the forefront, exploring the possibilities of blockchain, cryptocurrencies,...

Read More