Do you need a CFO to oversee your business, or is it better to outsource to a business advisor? It all depends on your business set-up and circumstances.
CFO or Business Adviser: Which One Is Right for Your Business?
Businesses in Australia, and across the world, rely on an in-depth understanding of their financial situation. Without this understanding, short-term cash flow and long-term financial management both suffer. A Chief Financial Officer can oversee finances and provide this understanding, but they also command a high salary. This puts businesses in a difficult position.
A business adviser can also provide this function. However, many businesses are uneasy with outsourcing this key element of their operation, and would prefer to handle all of this on an in-house basis.
So, which is the best option: CFO or business adviser?
The case for a CFO
The CFO of your business is a senior executive within your organisation, and provides a number of different benefits.
- The CFO is invested in your business, and you can guarantee that they have your organisation’s best interest at heart.
- Your CFO is devoted to your business and will maintain focused on achieving your aims.
- Your CFO already knows your business inside out, as well as your market and your field.
- You can call upon your CFO whenever you need and arrange a meeting with them, securing easy communication every step of the way.
These advantages make a CFO a highly attractive proposition for businesses looking to secure long and short-term financial security. The question is: Is hiring a full-time CFO really worth the investment?
The case for a business adviser
A business adviser is a third-party professional, and does not form a part of your in-house team. However, just because a business adviser is not part of your organisation in the same way a CFO might be does not mean that they are not highly effective. The best business advisers will work to make sure of the following.
- A professional business adviser will be able to offer this same commitment and devotion to your organisation.
- A business adviser should already know your market and your industry, and will be able to learn quickly to understand the workings of your business.
- Your business adviser will be reachable via a number of different communication channels, and will be able to schedule regular meetings to keep this communication flowing.
Business advisers also offer the following benefits:
- A business adviser is a more cost-effective option. Rather than paying a high salary for round-the-clock service, you can simply cover the cost of the services you need.
- A business adviser will be able to draw upon a broader range of areas of expertise, connecting your business with the latest best practices.
- An outsourced business adviser gives you more flexibility to react to changes in the market.
- An adviser’s payment structure is based upon performance, so you don’t have to pay for leave or any non-productive time.
- It is easier to terminate the contract if it’s not working out with a business adviser than it would be with a CFO.
- An adviser will provide ongoing developing knowledge from numerous businesses, thanks to continued exposure to other entities.
The best fit for your business
Deciding on which option is the best for you really comes down to your own situation. If you have the funds and the resources to hire a full-time CFO, this might be a good idea. You will benefit from having a person on your team around the clock to keep your company on track and to help you grow and develop in the future.
However, for many businesses, this cost is difficult to justify. A business adviser will provide most, if not all, of the same advantages in a far more flexible and cost-effective manner.
Reach out to our team today to find out more about what an expert business adviser and strategic planning professional can do for your organisation.