Most startups are on a tightrope when it comes to funds. And appointing a CFO would be the last thing on the mind of a startup owner. The general mindset is that CFOs are for multi-million dollar corporations, and startups don’t need them.
However, this is a misconception and could not be further from the truth. A CFO can shift the gears for a startup looking to grow.
However, appointing a full-time CFO might not be feasible for a startup, but outsourcing to CFO services is definitely worth considering.
In this article, we present some solid reasons to show how CFO services can help a startup.
So shall we dive right in?
Benefits of An Outsourced CFO:
Though small and medium businesses may not realize it, a CFO can manage the entire finance department. Below are some primary advantages of onboarding a CFO for a startup.
1. Tax Planning and Compliance:
CFOs can ensure that startups are complying with all the latest tax rules and regulations. A CFO can do tax planning and give the best strategies so that startups get the required deductions and credits. He acts as an advisor who is always around to bounce off the tax implications of any new growth strategies.
Especially creditors or venture capitalists prefer to work with startups who have all their financial affairs in order, especially from a tax perspective.
2. Ensure Financial Records Are In Order:
A startup entrepreneur can shift the burden of managing, organizing, and reporting the financial transactions to a CFO. A CFO service will check that the accounts are up to date and there are no discrepancies. A startup having a CFO will be on solid ground with regard to finances.
3. Data-based Insights:
Analysis of a startup’s financial data can give valuable insights into the business. A CFO can generate reports and provide valuable insights about financial stability, cash flow position, inventory position, and many other crucial areas. These can help entrepreneurs make data-driven decisions for their business.
4. Financial Planning and Risk Analysis:
It is not uncommon for startups to merge with another firm or take their business public. In both cases, a high level of financial expertise is needed to manage the change. A CFO can ensure a smooth transition and also see that the financial growth is not compromised. Also, he can conduct a risk-benefit analysis to see how it affects the financial holding of the startup owners.
5. Control Business Expenses:
CFOs can ensure that the limited funds are utilized in an optimum manner to yield the highest ROI. He ensures that your inflows and outflows are balanced. By implementing appropriate financial strategies and monitoring factors that can affect the finances, he can bring about financial stability.
A CFO, either in-house or outsourced, can make a big contribution to a startup’s operations, financial viability, and growth. So be open to working with CFO services even if you are a startup.
If you are looking to outsource your financial accounting, we at FinAccurate are here to help you.
If you would like to watch the video of this article, click on the link below:- How A CFO Service Can Boost A Startups Financial HealthOther Accounting Related Information