How do you create value in your business when economic conditions are less than ideal? As supply chain and talent shortages, inflation, rate increases, and other market pressures continue to separate the wheat from the chaff in this uncertain market, businesses must prove they have what it takes to support growth and profitability. 

Heading into 2023, company leaders must be laser focused on strategic direction, cash flow, and strong budgets and balance sheets no matter what the next year holds. 

But how do you get there? What does it take to keep your company financially strong when in the face of economic hurdles? It starts with building a robust finance and accounting function that includes effective CFO leadership, excellent data, and a skilled finance team that can execute on key strategies.  

Who Should Outsource?

Your finance function is a holistic entity. No matter what stage of growth you are currently in, you need a range of resources including CFO leadership, accounting operations, financial closing and reporting, financial analysis, and risk management. 

The problem for many founders, however, is that it takes time and money to build a team that can do all of those things well. Trying to build your finance team linearly, one person at a time, requires a huge investment of resources as you source, recruit, screen, hire, onboard, and train each new member of the team. Even then, the person you hire may not be a good fit, or you may not be able to attract the quality of talent you really need to create competitive advantage.

Enter outsourcing. Outsourcing part or all of your finance function gives you immediate access to a fully formed team of high-quality, skilled talent that is ready to hit the ground running on Day One.

How do you know if outsourcing is the right move? Here are three indicators:

You have finance pain points that need to be solved immediately. As companies grow, new financial challenges arise due to increased volume, complexity, and sophistication. An outsourcing partner can help you solve these challenges by providing the specific competencies you need, exactly when you need them. As your business becomes more complex, you can quickly scale your team and tools to meet emerging needs without having to make any internal hires.

You are at a pivotal growth point. Every business goes through critical inflection points as they grow. Scaling your business, pursuing funding, navigating an M&A transaction, planning and executing a digital transformation, and other key growth activities often require additional talent and strategic leadership to achieve a successful outcome. For example, if your business is going through a first wave of scale and you are in the range of $1M-$20M ARR, outsourcing can elevate your finance function to support added complexity and volume. It can also help you add a new layer of sophistication to your financial systems and processes, analytics, and accounting operations.

You need to optimize your talent investment. If your plan is to hire a senior accountant, then a controller, then a CFO, etc., you’re essentially left to struggle along indefinitely without the talent you need to feel confident in your finance function. You’ll invest hundreds of thousands of dollars into salaries, taxes, and benefits (not to mention the costs of recruiting and hiring), and you still won’t have a fully developed team. Outsourcing makes it possible to implement an agile workforce strategy and invest your dollars where they make the most impact. Instead of getting one person with one skillset, you get a team of people with the full range of skills you need.

What Are the Benefits of Outsourcing for Growth Companies?

Now, you may be thinking: It’s true. I do need some support with my finances. But how exactly can outsourcing help? 

That’s a great question. It’s critical that you understand what’s possible so you know what to look for in an outsourcing partner. Here are 4 ways the right outsourcing partner can give you financial peace of mind.

1. CFO-Level Leadership – It’s not enough to have a CFO. If you are going to create competitive advantage through your finance function, you need the right CFO to spearhead your financial strategy. That means working with someone who knows your industry and has the ability to execute against strategy. He or she also needs to complement the strengths of the CEO by providing financial vision, leadership, and insight to support the decision-making process and keep growth activities on track with business needs and goals.  

2. Skilled Team – Outsourcing puts you in partnership with a skilled finance team that is ready to hit the ground running. They serve as an extension of your executive leadership team, allowing you to execute on strategy and goals while also gaining flexibility, visibility, and scalability.

3. Systems and Processes – Once you grow beyond the effectiveness of manual processes and spreadsheets, you need an efficient way to upgrade your systems and processes. Growth businesses need efficient, scalable systems for capturing and storing data, automating manual processes, and supporting long-term growth. You may also need help redesigning your financial close process, cash flow management strategy, financial statements, and other key functions. An outsourcing partner can help you build and implement your financial systems so they serve you well both today and ten years from now.

4. Investor Readiness and Valuation – Uncertain economic conditions can present strategic opportunities to acquire or sell if your business is financially strong. If you are considering an M&A transaction, an outsourcing partner can serve as an extension of your executive team to help you close the deal. By leaning on the expertise of an external team that is experienced in investor readiness and valuation, you’ll have the support you need to improve deal quality, achieve premium multiples, keep the deal moving, and coordinate efforts among all the players involved.

5. Freedom to Pursue Growth with Confidence – Most successful companies focus internal investments in areas that are central to their key strengths and their competitive advantages. They have the opportunity to outsource almost any other aspect. Focusing on their strengths keeps them hyper effective at their core rather than depleting resources on other non-core areas. In other words, they can procure a successful accounting and finance function in days by outsourcing it, when it would otherwise take them years to build their accounting and finance function from within. In the time spent trying to build internally, companies could have deployed the resources used to build the function to other strategic growth areas. With trusting an outsourced entity with your accounting and finance function, you’ll have the freedom to pursue growth in other areas of your business with confidence!

Flexible Finance Leadership & Execution

Outsourcing gives you the financial flexibility, scalability, and depth (complexity, sophistication) you need to create competitive advantage and position yourself for success. With the right team behind you, you can build a strong accounting and finance function that helps you weather the economic storm and positions you to seize growth opportunities as they arise. 

At CFO Alliance, our mission is to help founders like you fill their financial gaps with sophisticated leadership, data, and systems. Our team of financial leaders and doers serves as trusted partners and an extension of your team, delivering the leadership, strategy, and execution you need to achieve your goals. Download our Founders Financial Playbook and take our Financial Readiness quiz! It’s a step-by-step guide to assessing the current state of your finance function and creating a finance strategy that gives you everything you need today, plus effortless capacity to scale as you grow. Contact us today to learn how we can help you take your next step!