How to Validate a Outsource CFO Service Provider’s Credibility?

Outsourced CFO services are now fast becoming quite mainstream because of the rise in demand by small business owners and entrepreneurs who see the obvious utility in taking the services of an outsourced CFO on-board to manage their important F&A tasks. 

To cater to this rise in demand, the number of firms offering outsourced CFO services has risen dramatically in recent years as well. This might seem like a very good thing for small business owners, since more competition means that outsourced CFO Service providers will now lower costs and add more features to their existing packages in a bid to get more businesses to acquire their services. But there is flip side to this as well, which as a business owner, you should never ignore. 

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Hiring an outsourced CFO Service means that you are handing over your sensitive financial data to someone so that they can prepare different financial records, file your taxes and help you gather relevant financial information which is essential towards making informed business decisions related to things like investing in new ventures etc. 

Therefore, the service provider’s credibility is highly important here because if you don’t check things through, you can either get scammed or hire an inexperienced team, both of which can cause considerable damage to your F&A tasks and inadvertently, your business. 

So how exactly can you determine that an outsourced CFO Service that you are looking to hire has the required credibility? Well, to ensure this, you will need to look at the following factors: 

Check For Accreditations & Credentials:

Firms that operate in the financial domain are conventionally part of professional bodies that lay down rules of conduct and ethics for them to follow. On top of this, businesses also can opt for acquiring accreditation from these bodies or from other industry renowned certification bodies. On the individual level, the CFOs that work in any outsourced CFO firm must possess relevant academic qualifications and industry credential that make them worthy of performing the job at hand. 

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When hiring an outsourced CFO firm, make sure that you have enough information on these fronts, so that you know that the people you are going to partner with over such a sensitive solution are capable and qualified of handling the requirements in the required manner. 

If the outsourced CFO firm doesn’t come forth with these credentials, then there is a red flag here that you shouldn’t ignore, because, after all, you shouldn’t be doing business with those who don’t have the required qualifications. 

Past Client Work: 

When hiring any outsourced service provider, you are looking for just one thing i.e. tangible business benefits. Anyone can build a great website and put some marketing copy in it that says that working with them will help you realize your goals, but that is easier said than done.

An outsourced CFO does a lot of important F&A tasks for a business and you don’t just need these tasks done, but you are looking for results through these tasks. So when you are in talks with an outsourced CFO Service provider, then ensure that you ask them about the work they did for their past clients, the growth this activity brought to the clients and what decisions did the outsourced CFO help them with. 

Through acquiring this information, you can exactly know whether the outsourced CFO is good enough to be handed over your F&A tasks or not. 

Online Reviews & Ratings:

Nowadays, a lot of people and businesses post reviews and rate the firms that they have worked or interacted with. Such information is easily available online. From generic platforms that include information on all businesses like Google My Business or Trustpilot to niche specific rating sites, you have a lot of places to go over and check whether clients were satisfied when they interacted with a business and what weak points were identified often.

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Here, you need a word of caution. Don’t believe the reviews you see on the site of the outsourced CFO Service provider, because generally, a lot of them can be fake. Apart from this, the reviews you see on neutral sites, go over to Google and run a simple search on the names and companies mentioned in the reviews by the reviewers, and if you do find these names and companies as genuine, then you can easily trust them and base your decision of hiring an outsourced CFO through them. 

Checking For Quality Of Process: 

Outsourced service providers provide value to business by bringing on-board, a chain of highly refined processes through which to run important business tasks and functions. It’s these processes that can help small business get out of the rut easily and forge together a state of functioning that makes results easy to come by. 

So when you are hiring an outsourced CFO Service, you should ask them about the processes they will apply to each specific task as a CFO. If they have been working in the industry for a while now and have helped businesses through their services, then their process will be available and be of top notch quality. 

However, if the outsourced CFO Service fails to do that and instead shows you some very generic processes, then you probably shouldn’t be doing business with them. 

Data Privacy Mechanisms:

Obviously, an outsourced CFO will be able to access sensitive financial and business information related to your firm when performing the required tasks. A credible outsourced CFO will understand that important of keeping this information private and highly secure during transit and storage. 

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Inquire about the data privacy and storage mechanisms that the outsourced CFO has in place for clients and their information, for e.g. storing data in encrypted form in secure cloud servers and ensuring data transit through VPN enabled connections. If the information you get here is credible, then you can easily make your decision to opt for this outsourced CFO Service to handle your tasks. 

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Wrapping Up:

Outsourced CFO services are not just cheaper to acquire than having an in-house resource but it also allows you to access a vast, integrated network of industry contacts, latest tools and techniques to ensure that your financial performance is up to industry standards. So don’t comprise here at all and ensure that the provider you are opting for has all the required credibility to provide you with these business advantages in order to ensure that this partnership helps your business grow like you intended it to.

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