Small businesses are an important part of the U.S. economy. Every year, they employ about 1.5 million people. Many small businesses are started by one person and grow over time. At some point, a small business owner will need to employ a full-time CFO to ensure the financial stability of their growing company. But what should they do in the interim period when their company is too complex to manage themselves, but not big enough for a full-time CFO? Outsourcing the CFO function from Nexagy is a good option, especially when choosing CFO services with the following characteristics.
Ensure that the CFO has the necessary industry experience
The CFO needs to understand the nature of your business to help plan and design the business financial growth strategy. The outsourced CFO has to know the market threats and opportunities and advise the business owner accurately to prevent jeopardizing key activities. A CFO with good industry knowledge can design adequate accounting processes and control systems to ensure good cash flow and prevent fraud.
Outsourced CFO needs to be trustworthy
Ideally, the CFO should be able to communicate freely with the CEO and, if need be, keep them from making financial blunders at the expense of their business. At the same time, the CEO needs to trust the CFO’s judgment and value their opinion to act on the advice given.
Outsourced CFO should have “crisis” experience
When hiring an outsider to steer the financial strategy of the business, it is best to hire someone who has experience working for a business in a financial crisis. That experience will give the CFO the ability to turn your business around should the need arise.
The CFO should provide thorough reports
One of the functions of outsourced CFO services is to provide business owners with thorough financial reports that give insight into business financial standing and can be presented to investors or banks. Presenting a detailed financial history gives business credibility when the time comes to raise more capital for further expansion.
As a small business owner, you know your business needs best. However, to ensure continued business growth and the financial stability of your operations, a CFO can help develop a successful strategy. Hiring a full-time CFO is unnecessary, especially when your business is growing, but consider outsourcing the CFO services. Reach out to Nexagy to get started today.