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4 Signs your business needs an outsourced CFO or controller

May 6, 2024

by Jay Dunphy, CPA

Life moves quickly when you’re a business owner. Your days are packed with meetings, putting out fires, dealing with emails, and the like. The last thing you want to be worrying about is your business’ finances. But if you don’t have someone who’s dedicated to overseeing and managing them, you could end up with even more stress on your plate.

This can easily happen if you don’t have a chief financial officer or controller on your team. Thankfully, there’s a way you can benefit from controller or CFO services without adding to your payroll: Working with an outsourced (also known as a virtual, part-time, or fractional) CFO or controller.

Outsourced CFO vs. controller: Which makes sense for your business?

Whether you’ll need CFO services or controller services will depend on your business’ needs.

A controller typically gets into the weeds of your finances. Company controller duties could include managing your accounting department and its controls and processes; compiling and reviewing financial statements; and providing support for tax returns and management meetings.

The CFO role is more strategic, using a high level of financial expertise to guide your team in understanding the 30,000-foot view of your business and identifying the actions you can take to reach your goals. Examples of CFO services include conducting a financial statement analysis, cash flow forecasting, and creating an annual budget.

What’s more, the CFO is also a strategic member of the company’s leadership team, strategizing opportunities to grow the business and enhance profitability while also managing risk.

Here are a few signs that your business could benefit from an outsourced CFO or controller.

1. Revenues are going up, but your gross profit margin is doing down.

Say you’ve manufactured a widget, but you’re making only a 15% margin on it when the industry benchmark is 25%. You’re barely breaking even.

What gives?

You could be paying too much for materials, or your labor could be out of whack. Or, perhaps your equipment is inefficient. Regardless of the cause, an outsourced CFO or controller could get to the bottom of it—or even help to prevent low margins in the first place.

2. You’re growing out of control.

Growth is your goal. However, growth must be supported with a framework that will propel your business forward.

For example, if you’re struggling to keep up with rapid demand growth, you may be quickly making unplanned decisions to hire people and purchase software, which often results in errors in quality errors and lapses in customer service.

An outsourced CFO or controller can establish a process for growth that aligns with your goals for the future. This could also include forecasting and budgeting for additional resources as well as a software evaluation to help you understand which applications truly benefit your business. The latter, in particular, can allow you to streamline operations and free your staff to focus on strategic objectives.

3. You’ve had a great year but you don’t have cash in the bank.

If you don’t have anyone managing your “front of house” or evaluating your accounts receivable, you can easily run into cash-draining issues such as paying vendors too quickly. Other causes of low cash flow include poor inventory and debt management.

Adding an outsourced CFO or controller to your team can help you avoid these pitfalls—particularly when it comes to debt management. Your CFO or controller can analyze your debt and help you manage or consolidate it in a way that improves cash flow.

4. Your growth has stopped.

There are so many reasons why a business’ growth plateaus. Are you losing market share or missing market opportunities? Do you have the right product mix? What’s happening with your sales?

Whatever the reason may be, a financial expert, such as a CFO or controller, can help you identify the problem and get back on track.

Get the right guidance for your business.

Operating without a financial expert on your team can make it more difficult to reach your goals, even if your business is running smoothly.

If you’d like to explore how an outsourced controller or CFO could benefit your business, the advisors at Abdo can help. We offer scalable controller and CFO services, so you always have access to the financial support you need.

If you’d like to learn more about how we could provide financial guidance for your business, contact us today.


Meet the Expert

Jay Dunphy, CPA

Jay’s core principle: help clients navigate bumps by strategically planning ahead for challenges.

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