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Inhouse vs Outsourced CFOs

Dec 22, 2022 | News

Chief Financial Officer (CFO) 101

Ever wondered what a Chief Financial Officer (CFO) does, why they appear to have so much sway in a business, or what you are missing out on by not having advice from a CFO? Then read on because we will answer all of your questions in the following blog, including:

  1. What is a CFO?
  2. What exactly does a CFO do?
  3. What is an outsourced CFO?
  4. What benefits can an Outsourced CFO offer?
  5. Difference between an in-house CFO vs. an outsourced CFO?
  6. What are the Advantages of Outsourced CFO Services?
  7. How can Stone Bridge Associates help?

1 – What is a Chief Financial Officer, or CFO?

The highest-ranking financial expert in an organisation who oversees a company’s financial operations is referred to as the chief financial officer (CFO). The chief financial officer’s responsibilities include monitoring cash flow, budgeting the company’s finances, identifying its financial strengths and shortcomings, and making recommendations for improvement.

Building a top-notch finance and accounting team is one of the CFO’s duties, along with maintaining revenue and expense balance, managing FP&A (financial planning & analysis) activities, recommending mergers and acquisitions, securing funding, collaborating with department heads to analyse financial data and create budgets, attesting to the veracity of reports, and providing advice to boards of directors and the CEO on strategy.

Based on their financial insights and domain expertise, CFOs may also recommend changes to supply chains and marketing strategies, as well as help determine the future of technology, particularly fintech.

2 – What exactly does a CFO do?

The CFO oversees the financial targets, plans, and budgets of an organisation. As a CFO, you monitor the investments made with the money the company has on hand and evaluate and control the risks involved. They may also handle mergers and acquisitions, carry out capital-raising plans to assist a company’s growth, and oversee cash management activities. The majority of CFOs also serve on the board and are in charge of managing the company’s investments.

A smaller company’s CFO could be required to do a variety of accounting duties, but executives at larger enterprises frequently evaluate reports and data from numerous departments inside their organisations.

3 – What is an Outsourced CFO?

In today’s economy, businesses outsource a wide range of tasks, including accounting, payroll, IT, and marketing. However, a lot of business owners are unaware that they can outsource the financial operations of their organisation.

Businesses can access financial specialists with a variety of skills who are devoted to staying up to date with industry best practices by outsourcing CFO services. Additionally, it enables business owners to utilise that knowledge as needed rather than investing in a full-time inside staff.

The same strategic function will be performed by an outsourced CFO, but rather than joining your business as a corporate officer, they will collaborate with you on a contract basis. The majority of outsourced CFO services are offered on an hourly or subscription basis (also known as fractional CFO or virtual CFO services).

4 – What Benefits can an Outsourced CFO offer?

An outsourced CFO can help the company with:

  • Plan, monitoring, reporting and identification of key metrics.
  • Create regular financial results reports.
  • Create strategic plans while keeping an eye on cash management in real-time.
  • Examine the budgeting process and develop an annual strategy.

Furthermore, the service may selectively include:

  • Virtual CFOs may assist businesses in developing their financial story and engaging in some basic pitching. However, it is not advisable to rely entirely on them for lead generation.
  • They may assist businesses in managing finance-related IT systems, but not in managing IT staff. The service can assist you in establishing ground rules, which can then be used as a guidebook by internal staff.
  • The service may or may not include participation in the boardroom. Virtual CFOs, on the other hand, can be asked to prepare the team and other C-Suite members for a big meeting.
  • They may provide basic advisory and analysis to businesses involved in mergers and acquisitions.

5 – In-House CFO vs. Outsourced CFO?

Cost vs. Value

The first thing weigh up is cost versus value. A good CFO is not inexpensive! The average salary for a CFO in Australia ranges between $200,000 and $350,000 per year, depending on experience. And that is without any benefits, which any good CFO would expect.

Ironically, many small-to-medium-sized businesses (SMBs) will balk at such a financial commitment, but they’re probably at a point where they could benefit from the guidance that a CFO can provide. A part-time, or outsourced CFO may be the ideal solution because they allow businesses to access their experience and expertise on an as-needed basis.

Experience vs. Opportunities

While an in-house CFO may have extensive experience in one or two industries, particularly if they have worked for the same company for a long time, their specific experience may limit their ability to see opportunities and possibilities beyond their previous experience.

One of the major benefits of a part-time or outsourced CFO is that they frequently work for more than one organisation at the same time and in different industry sectors. This exposes them to various industries with varying working practices, opportunities, broader networks, more rounded perspectives, and a broader vision.

This frequently results in levels of thinking being introduced into organisations that would simply not have been available if the business had a full-time long-term CFO who specialised in one industry sector.

Aside from potentially limited exposure to other businesses and opportunities for broad experience, a full-time CFO is only one person, with one point of view and all of the potential prejudices that one point of view may contain. When a company hires a part-time or outsourced CFO, it benefits from the individual’s expertise and experience, as well as the expertise and experience of the team the outsourced CFO works with and all of the companies that team of CFOs works for.

So, while one CFO is the point of contact for a company, the relationship is with a team of CFOs from the outsourcing company.


An in-house CFO will often have their own method of reporting that works for them and can be based on methods they’ve developed over time, including non-standard formatting of documents and reports. This usually works fine, but it can take a business further and further away from standard industry reporting, which can become a real problem in the long term.

A part-time or outsourced CFO is much more likely to be using widely accepted and up to date industry reporting standards as they are likely to be working for multiple businesses across different industries.

They are also likely to use cutting-edge software and hardware, providing their clients with higher levels of automation for meeting the most recent tax, legal, and compliance requirements.

Cultural Harmony

It is always difficult to hire a senior member of staff. They will frequently want to use their experience to make changes to the business, which may be viewed negatively by current management or company employees. It is also common for business owners to be uncomfortable with new senior recruits making significant changes in their company’s operational or financial practices.

A significant advantage of a part-time or outsourced CFO is that they are accustomed to working with a wide range of individuals and businesses, as well as cultures and personalities. This has given them valuable experience in integrating into a new company with minimal disruption.

The fact that they are identified as outsourced or part-time relieves the pressure of ‘fitting in,’ and the expectation is for them to come in and get to work.


An in-house CFO will unavoidably have their own professional network, but with time, it will dwindle, get older, and probably stagnate.

While a part-time or outsourced CFO is a different situation because they will be working with a network of fellow CFOs and are likely to work for multiple companies, so will have a network bursting with current and active contacts. This can be very beneficial to a business, especially smaller businesses looking to grow, to raise equity, and to meet more people with a variety of skills.

When a company wants to significantly expand into an existing market or branch out into other industrial sectors or geographical regions, it is also helpful to have access to a large network of professionals. A large CFO network will almost certainly include investors as well, and that may be quite crucial for a company wanting to grow and obtain capital.

Track Record

Hiring a senior full-time employee is seldom without risk, and hiring a CFO is no exception. On what will probably be a relatively limited number of businesses that they have worked for, it is feasible to see the impact that they have made throughout their career. Additionally, it is feasible to examine how their choices have affected the probably small number of organisations that they have been associated with, but this is only a snapshot and can make the hiring decision risky. It might be difficult to predict how well a CFO will function for a company in a new setting, however this isn’t always the case.

However, with a part-time or outsourced CFO, it is likely that they will have worked for a number of businesses, making it much simpler to build a picture of their performance and track record. This inspires far more confidence in the person for a business and also provides more proof that their skills and experience will more closely match the needs of the business. Consequently, it turns into a far less hazardous approach than hiring a full-time CFO, who might not have the personality, skill set, or experience the company and its management or owner need.


The widespread perception is that it can take a senior employee six months to a year to adjust to and become proficient in a new role with a new organisation. For someone who will oversee the organisation’s finances from the beginning, this is a very long time!

In whatever organisation they work for, regardless of the circumstances or condition the organisation finds itself in, a part-time or outsourced CFO will have substantial experience launching themselves into action. In order to ensure that the organisation reaches its objectives, a part-time or outsourced CFO will be able to assess the situation a corporation is in and begin taking actions and putting procedures in place from day one.


Clearly, hiring a part-time or an external CFO has several benefits. A business won’t have to make the financial obligations associated with hiring a senior full-time employee, such as paying a high salary with numerous extras.

However, by hiring a part-time or outsourced CFO, the company will still receive all the advantages of expert advice, leadership, and leadership skills. They will also have someone who can pick things up quickly, is used to working in a variety of different businesses, and brings a wealth of knowledge, contacts, and the combined experience of all their CFO colleagues.

6 – What are the Advantages of Outsourced CFO Services?

A business’s financial performance can be significantly enhanced by an outsourced CFO service by:

  • Preparing new budgets and financial plans or reviewing current ones to make sure that corporate goals are achieved.
  • Find solutions and treatments to faults and concerns with the current business strategy to get the company’s finances back on track.
  • Implementation of financial reporting systems and other procedures that offer a wealth of knowledge about how well organisations are performing
  • Make sure businesses are compliant and that processes are created to prevent fraud, mistakes, and cybercrime. Make that the company is sufficiently insured against all risks and has a data protection strategy that works.
  • Offer strategic insight into the target market for the business, the performance of the organisation’s products, the demographics of its customers, and the rivals of the business, etc.

An outsourced CFO service will create a business model for a company that takes into account a number of aspects, including:

  • Market constraints
  • Performance and products of competitors
  • Market forecasts
  • Examine the available internal and external sources
  • Prospective and probable client behaviour
  • Positioning and trends in the marketplace
  • Build a thorough business finance plan.
  • Additionally, a corporation may outsource the following CFO-related duties:

Financial Planning and Management

A business’s whole financial operations can be managed by an outsourced CFO service. They may create internal accounting structures, controls, and systems, deliver timely reporting, and ensure that strict procedures are followed for all accounting duties. Fast-growing businesses stand to gain the most from consistent financial planning and projections. In order to deploy resources and funds to fulfill objectives, an outsourced CFO service will create reporting frameworks and rolling forecasts that look forward for a year or more.

Cash Flow Management

Cash flow statements that include net income, long-term assets, shareholder equity, and liabilities will be produced by an outsourced CFO service. As well as using cash flow analysis to assist with managing and improving cash flow. In order to aid in raising money from investors, lenders, and other financial institutions, an outsourced CFO service will also prepare presentations and attend business meetings.

Overcome Financial Difficulties

It can be highly beneficial to hire an outsourced CFO service when a company is having trouble to provide professional guidance and expertise to help the company get back on track. The sooner this is done when issues arise, the simpler it will be to get back on track financially. A CFO service that is outsourced can assist with:

  • Profitability and poor cash flow
  • High costs of doing business
  • Losing customers
  • Failing to raise money
  • Company Growth

When a company decides to scale up, an outsourced CFO service can create all the financial instruments required. They can particularly:

  • Make sure the finance system is reliable and appropriate for the situation
  • Find the tax structure that is the most cost-effective
  • Apply for registrations in many states or even countries
  • Organise the process for securing investment or equity
  • Assist with finance and loan applications
  • Conduct risk analysis and financial projections

6 – How can Stone Bridge Associates help?

The decision to resource a CFO in-house or via a virtual CFO should not be taken lightly. As a provider of virtual CFO services, Stone Bridge Associates is able to assist with the first steps of establishing whether your business demands an in-house function, or can benefit from the flexibility, broad experience and skill set outsourced CFO’s offer. The first step in determining the next best step is to book an obligation free consultation to see if we can help.



Should you wish to discuss anything regarding this topic, contact us today for an obligation-free discussion.