Is Your Growing Creative Agency in Need of an Outsourced CFO?

By: Shay James

smiling woman with laptop

Starting a business and watching it grow legs is a very rewarding and exciting experience. However, when your business starts to grow, you may find yourself facing financial challenges you never expected. And while you’ll always be an expert in the services and products your company delivers, it’s okay if you don’t have all the answers when it comes to the finances.  

For that, you may need to hire a professional. When your creative firm grows quickly, it’s only natural that your financial situation becomes more complex. Whether you need help managing payroll, keeping the books balanced, preparing for taxes, or something else entirely, it may be time to ask yourself: Could you benefit from hiring an outsourced CFO?

To answer that, let’s start with the basics.

What Is an Outsourced CFO?

An outsourced chief financial officer (CFO), also referred to as a fractional CFO, is a high-level financial expert who works for your business on a part-time basis to help you keep your finances organized and make the most of financial planning opportunities. 

Outsourced CFOs are typically brought in by growing companies that don’t have the need for a full-time expert but could benefit from more complex financial advice. These complex financial needs include things such as analyzing risk, looking into cost and process improvements, and creating financial forecasts.

Additionally, outsourced CFOs are able to deal with the incredibly important, yet complicated and ever-changing processes for tax planning and compliance, which new small business owners may not be well-versed in.

Benefits of Hiring an Outsourced CFO

If you think it might be time for your company to hire a financial expert, it’s important to note some of the benefits of outsourcing your CFO services rather than hiring a full-time individual. Some of these benefits include:

  • Cost-effectiveness

  • Customized support

  • Quality and honest expert advice

  • Flexibility of service

  • More time for you to effectively run your business!

Cost-Effectiveness

A typical CFO is usually paid $150,000 to $450,000 a year, or more! This cost is simply out of range for many creative agencies—and may always be so. But that doesn’t mean you don’t still need a CFO. 

Fortunately, an outsourced CFO can still provide the same key services, but at a fraction of the cost. And despite being the more affordable option, outsourcing does not mean a compromise in the quality of service. It just means you’re only paying for what you really need.

An outsourced CFO is just as qualified as a CFO in a similar full-time position. (In many cases, an outsourced CFO may be more qualified, as they’re creatively solving problems for many agencies at once). It’s also important to note that a good outsourced CFO should be able to increase your company’s financial efficiency by enough to essentially pay for themselves.

Customized Support

By working on a project basis, outsourced CFO services are customizable. You can hire an outsourced CFO to specifically target the areas where they are most needed to efficiently improve your business. For example, in the beginning, you may only need assistance with things like forecasting or creating a business budget. As your business grows, you may be able to add other CFO services such as more strategic tax planning.

Whether working on long- or short-term projects for your firm, an outsourced CFO should feel like a partner to the business leaders. They will get to know you and your business on a deep level. They will not only work to help you solve any current financial challenges, but also plan strategically for the future. 

Customization is something business owners should keep in mind when seeking out an outsourced CFO. It’s important to be aware of the needs of your company to ensure you are addressing the right projects and finding the best person for the job. You can even seek out an individual or company that specializes in your industry.

Quality and Honest Expert Advice

Because an outsourced CFO is brought on to focus only on certain financial aspects of your company, they may have the ability to make better calls than other business leaders who likely already have a lot on their plate. Additionally, fractional CFOs are able to provide high-quality and well-rounded expert advice due to their exposure to different clients and potential expertise in specific industries. 

Another aspect that plays a large part in the services an outsourced CFO is able to provide is the ability to give objective advice that is not influenced by personal biases. Despite being deeply involved in your company and working with its business leaders, an outsourced CFO will not have the personal stake in your company that you, the owner, or even a full-time employee may have, which could negatively influence major decision-making.

Flexibility of Service

Outsourced CFOs can provide the right level of services for your agency throughout different growth stages. You don’t have to wait until your firm is at a certain point to consider bringing on an outsourced CFO. As your firm grows and your needs change, an outsourced CFO can increase their involvement in your agency. 

For example, you may initially seek out a CFO’s financial advice concerning budgeting and forecasting. Months later, you may realize you need advice on growth strategies and tax compliance. An outsourced CFO can help with increasing financial needs as they arise.

More Time for You to Run Your Business

Businesses beyond their start-up days—but still in their relatively early stages—have enough to worry about without the added stress of complex financial issues. By outsourcing your CFO needs, you gain more time to focus on other areas of your company. This includes being able to put more time and energy into continuing to improve your products and services and promoting the best possible experiences for your customers. 

Hiring someone for CFO services should make running your business easier. Through outsourcing, you get the benefit of expert-level assistance without having to take on a full-time employee. It’s important to take a look at your company’s needs and goals and decide what’s right for you.

Partner with Lamplight Advisors For All Your Outsourced CFO Needs

At Lamplight Advisors, we provide high-quality outsourced CFO services to growing creative agencies. We specialize in outsourced CFO services like tax compliance, budgeting and forecasting, accounting, HR practices, and payroll. We strive to take the financial stress off of creative agency owners so they can put energy towards what they're best at. To see if we can help you with any of your financial needs, click here to schedule a conversation today.