Outsourced CFO

Most people hear this title and connect with the Outsourced piece rather well. It is not hard to imagine in our economy outsourcing almost anything that a business or not for profit needs. However, a lot of people do not seem to fully understand the Chief Financial Officer (CFO) part of the title. I have found that while smaller organizations are looking for the specific tasks provided by a CFO, they often believe that they are too small to have their own CFO.
This is where an Outsourced CFO can fill the gap. Working on either by the project or on an hourly rate, the Outsourced CFO can become a valuable asset while assisting the organization in meeting its goals. Almost every organization has a different view of what a CFO is responsible for. However the following list contains some of the more basic needs that the CFO will fill.

• Profitability analysis and maximization: identifying the drivers of profit and how the organization can maximize the outcomes of those drivers. In the Not for Profit world, identifying the drives of the organization’s mission.

• Cash Flow Management: cash is the lifeblood of every organization, managing the cash flow well can be the difference between failure and success.

• Strategic Pricing: by helping to fully understand the organizations costs, serves to set pricing to maintain market share and grow the enterprise while maximizing cash flow.

• Formalized Cost Containment: What are the real cost’s of the organization? What expense reductions will actually make it more difficult to generate Revenue or Cash Flow?

• Strategic Forecasting: attempting to drive a business simply using its historical Financial Statements has often been likened to driving a car by only looking through the rear view mirror. The CFO can take historical numbers and use them to build a forecast to manage the future. This forecast will allow the organization to see the impact its Strategic Plan is expected to have on the organization. When compared to actual results, it will allow for faster and more strategic adjustments to the plan as conditions dictate.

• Internal Control: Smaller organizations lack the staff and training to design effective controls to safeguard the organizations assets and protect its staff.

• Debt Financing/Equity Development: the CFO is invaluable in making sure that the organizations needs are properly presented to investors and lenders.
If you are the CEO of or on the Board of a privately held organization, which of these items would best serve the organization?