Top 5 Difference Between Accounts Outsourcing and CFO Services
For any business to proceed with its expansion module, it is necessary that no time is wasted on simplifying frivolous processes and opt for accounts outsourcing. It is with this thought that companies and firms started thinking of outsourcing certain procedures which were being difficult for them to handle. According to Deloitte’s Global outsourcing survey conducted in May 2016, when it comes to finding which departments outsourced the most Finance leads the market with a high 36% share was followed by HR and IT. With markets maturing most of the companies started looking at multiple ways to expand the outsourcing to totally new areas of finance and accounting.
Nowadays another way of doing the above is to hire the services of a dedicated CFO Service which can provide you the required expertise to handle such complex processes. This person can be recruited as per need basis and hence it is an efficient way to save money and get your job done at the same time. However, both accounts outsourcing services and CFO services are vastly different from each other and below we are going to tell you how.
1. Better expertize in the field
Hiring a Virtual CFO Service provides you with much better expertize on the same processes. This means that an accounts outsourcing firm would be able to handle your bookkeeping, accounting, and other simple functions. But if you are looking for someone to guide you through financial planning, strategy and analysis, then you must trust the outlook of a CFO.
Both accounts outsourcing firms and CFO would be doing the same kind of job for you. The difference, however, lies in the fact that the CFO is probably going to go a step ahead and provide information which is way above the knowledge domain of account outsourcing services. The amount of money you wish to invest in getting professional help for your services would decide whose service you eventually would take.
2. Consultation benefits and accounts outsourcing
Times have changed, and clients do not want to dish out accounting solutions. They look for ideas and suggestions which are going to provide them value beyond compliance benefits. Of course, they need traditional services like bookkeeping, tax preparation, accounting, and payroll but getting an advisor who can also give them tips to expand their business is an additional benefit.
This is where hiring CFO solutions becomes of critical importance. The change in the tax preparation systems has led to all firms wanting someone who can not only handle this process but also guide them on how to streamline it to their benefit. Apart from that a CFO outsourced firm also develops a business plan, gives training on key tax practices and guides on risk management and accounts payable. Looking for such consulting services is the need of the hour, and most firms understand that.
3. Business growth
There are many aspects and facets of the market, and at times it is tough to figure out how the tide will turn. An accounts outsourcing firm may be able to guide you about the basic tax policies and how to aptly implement them. But if you are looking at expanding your assets and increasing the business wealth, then outsourcing virtual CFO is going to serve your purpose better.
Apart from that the CFO’s duties also include finding out methods which would help in the achievement of strategic goals of your firm. Not to forget the fact that the outsourced virtual CFO also would plan your growth methodology through acquisitions and other forms of expansion. He or She is the right person to consult on how to modify existing strategy to achieve best results; a task which accounts outsourcing companies cannot accomplish.
4. Managing financial crunch
For any small company, it is often difficult to manage the cash flow without feeling the pinch. To top it you would want your business to grow and hence look for bigger projects to handle would be the next thing in your mind. However, these steps cannot be implemented without the finances being in order.
The accounts outsourcing firm can tell you where and how your finances are lacking. However, if you are looking at getting some expert tips on how and where to invest your cash to avoid any tight situations later, then hiring CFO services for small business is what you need at the moment. Not only that he would provide you a cash flow projection which would inform you on how you can cover your expenses and get maximum returns.
With so many salient benefits of a virtual CFO, it is normal to think that hiring one would be above your budget or capability. However, this is not true at all. While an accounts outsourcing cost would entail a bigger expense on you as it usually comes with a team of people handling the work. A virtual CFO takes his payment basis the duration for which his services are hired.
Moreover, you can always reduce his work hours and commitment as the requirement of your firm changes. Outsourced CFO’s can work remotely and hence any overhead expenses can be reduced. The pay package of a CFO is usually higher than what you would be pay to the normal accounts outsourced firm. But if you consider the flexibility and the accounting services that you are getting in return for that virtual CFO cost, you would find that hiring a CFO is financially a better deal.
Accounting is one of the key functions that need to be handled in any firm. When the need arises for finding a CFO for start-ups, we want someone to handle processes like virtual bookkeeping services with extreme expertize. Outsource accounting services give you guidance on all technical matters related to finance. However, if you are looking for a more detailed opinion on taxes, payroll, bookkeeping and accounts along with tips on the latest trends and technological advancements, then it is the CFO who must be hired. Not to forget the fact that a CFO would be able to increase your profits and manage your cash flow better. The choice of the right person, however, should be made wisely as the future of your business would largely be dependent on that.
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