What is Outsourced CFO services?
- This is accomplished by outsourcing the tasks that are normally performed by CFO(Chief Financial Officer) to a highly qualified and experienced professional who is not an employee of the company.
- It is referred as Virtual, as most of the tasks are performed offsite though modern means of communications combined with specific hours to be spent at company site.
- This is in the nature of Business Process Outsourcing services which is very commonly practiced in most places and evolving in Dubai or UAE.
- This arrangement achieves services of Highly qualified and experienced professional but at a fraction of the cost.
Outsourced CFO will help your business in following manners:
1. Financial Strategies
A higher degree of financial management is the biggest strength a CFO can bring to the business. Whereas most other finance positions in your company include holding past and current financial records, a CFO focuses on the organization’s comprehensive short- and long-term plan. An outsourced CFO is a specialist in long-term planning and finding out just what is needed to take your business from where you want to be now.
2. Short and Long Term Assessment
A financial prediction is one of the business’ most valuable techniques. It’s the detailed financial and operational blueprint that provides a step-by-step guide to take you from where you want to reach your objectives right now. A study, strategy and practicality are required for a financial forecast. It needs strategic understanding of your business’ current and future strengths, knowledge of financial analytics and patterns, and a comprehensive study of the competitive environment within your field.
3. Technique & Layout Of The Financial Structures
It may be time to re-evaluate if your financial management software and internal systems are unable to keep up with your development, are incompatible with your other operating and/or sales systems and processes or lack capabilities important to your business. While outsourced CFO typically do not implement the actual system, they can help in assessing your existing system, assess your long – term needs, design a combination of systems that will work best for the current and future growth of your establishment.
Assist in selecting and negotiating with a provider, help ensure that the transition runs as smoothly as possible and help train staff on new systems to maximize insight, comfort and use.
Although a forecast is usually a 5 or 10 year cost and expenses estimate, a budget maps out the projected financial information in detail. While this is a relatively short time period than the strategic prediction, a budget is essential to an organization’s day-to-day activities. This budget helps direct the financial decisions of the year, while keeping the company on track to achieve its objectives. A proactive CFO will also use a forecast as a rolling budget to help assure your financial performance is consistent with the priorities and strategy of the business.
5. Make Financial Statements Simpler and More Interpretable
Finance is important for an business’ day-to-day activities and financial reports keep you aware of your present (and future) rankings. Many outsourced CFO services in the UAE include facilitation, interpretation, and drill-down of financial reports. Let a CFO review your reports in a way that better suits your business needs and send you the most significant takeaways. This gives you the ability to ask questions, re-strategize as appropriate, keep informed about what is going on and have the details you need to make your business decisions.
Capital raising is usually very difficult for a company, but an outsourced CFO may provide resources to help the process go smoother. An outsourced CFO typically brings a network of financiers with him or her that they will introduce you to.
An outsourced CFO would likewise:
- Make sure that your current accounting and financial statements are important when it comes to positive discussions with potential investors or lenders.
- Include financial statements, analyses and due diligence records.
- Assist in the organizing of resources including how much funding you need and which combination of debt and equity financing is appropriate for your objectives.
- Carry your company with trust, credibility and integrity, by having an accomplished CFO representing you and your corporation.
- Review and negotiation timesheets.
7. Capital Structure
What more capital do you need, and what combination of debt and equity can help you sustain the profitability of your business while attaining the growth you want? An outsourced CFO facilitates expertise in order to help you decide which capital structure is suitable for your company.
8. Study Of Cash Flow & Restructuring
Cash flow is among the most growing problems many businesses face. Solving cash flow problems means more than just getting in more revenue, it includes understanding what you’re spending and where you’re spending it, and knowing which expenditures are important to the growth of the company and which can be cut loose or changed. Outsourced CFO are plunging deep into their budgets to find out how to boost the profitability.
- Renegotiating contracts with vendors
- Customer contract management
- Ensuring that rates are consistent with business & consumer patterns
- Analyze systems of commissions
- Managing the supply chain
- Assigning costs to revenue
9. Cost Cutting
Outsourced CFO can generally make more proactive cost cuts than an in-house team, making it as one of the highly regarded outsourced CFO services. The reason an outsourced CFO can be more effective is that:
- They will have extensive exposure to a variety of organizations in the same industry so they can analyze your expenditures with a deep understanding of benchmarks.
- They are more ambitions. Where managers or teams may have a stronger interest in particular projects or programs that may affect their cost-cutting strategy, outsourced CFO do not have these prejudices and make decisions based on evidence and experience.
- Cost reductions are expected to be more rational. Cost cutting is not a simple game of “large numbers are poor and small numbers are good.” There is a need for careful evaluation, data analysis and objectivity to achieve cost saving that is achievable and supports client priorities as opposed to undermining them.
10. Make Mergers & Acquisitions Simpler
Whether a merger, acquisition or partial, public, entity or asset sale is included in your deal, helpful CFO outsourcing services usually includes:
- Preliminary monitoring and review
- Ramping up financial roles
- Advise main team leaders about the selling process
- Preparing appropriate documentation
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