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December 18, 2023 | read

How Do You Know You Need an Outsourced CFO?

Thomas Castelli

Although many successful real estate enterprises have one, many investors overlook the measurable benefits of bringing on an outsourced Chief Financial Officer (CFO).

Outsourcing CFO tasks gives real estate investors access to an advanced financial planning skill set that helps them unlock the full growth potential of their portfolio. This is because the primary role of a CFO involves using strategic leadership to implement high-level, accurate, and efficient financial infrastructure that shifts a business from operating in a state of reactivity to a state of proactivity. 

At Hall CPA, we provide all the outsourced accounting services you need for optimal performance and portfolio growth. Contact us to learn more about how we can help you take your real estate portfolio to the next level.

Taking a proactive approach to financial management means you’ll be better equipped to handle challenges. You’ll identify new growth opportunities, save money, and reach your financial goals quicker. 

In this article, we’ll explore the signs that indicate that your team could benefit from an outsourced CFO. Keep reading to learn more about how these accounting experts can help you grow your business.

What is an Outsourced CFO?

An outsourced CFO, or Chief Financial Officer, is a high-level professional who can bring advanced strategic leadership to a real estate investment business on a part-time or as-needed basis. 

Hiring an outsourced CFO to advise you on financial growth can unlock valuable opportunities that can grow your assets, maintain compliance, promote accounting accuracy, and improve stakeholder relations.

Because of their sophisticated skill set, in-house CFOs are often too expensive for most real estate investors to hire on a full-time basis. Outsourcing these high-level tasks to a CFO is considerably more cost-effective but can still provide the same services:

  • Budgeting
  • Navigating challenges
  • Investment strategy advice
  • Leadership and management
  • Assistance with raising capital
  • Development and implementation of financial processes and internal controls

Hiring an outsourced CFO instead of creating an in-house role means there may be more funds to support a specialized hire. CFOs who specialize in real estate accounting come equipped with unique domain expertise that enables them to tackle complex challenges in the industry.

6 Signs You Need an Outsourced CFO

As a real estate investor, there are many accounting professionals you can outsource tasks to. A CFO offers the most advanced skill set and the greatest potential to improve your business. Here are six signs your team could benefit from the expertise of an outsourced CFO.

1. Your Accounting Infrastructure Needs Work

If you’ve ever felt overwhelmed by a lack of solid infrastructure in your accounting system, then an outsourced CFO is the solution you’ve been searching for.

CFOs can provide the high-level accounting services, financial planning, and management that your team needs to set up a robust and reliable accounting infrastructure. They can help develop financial processes that streamline workflows in your organization as well as implement internal controls that increase the efficiency and effectiveness of your current accounting systems.

The benefit of hiring an outsourced CFO to do this work is the flexibility. Once the CFO has developed and implemented a comprehensive infrastructure of accounting processes for your team, you can scale back their workload in order to focus spending where it is most needed.

2. You Need Help Navigating Lending Requirements

CFOs who specialize in real estate accounting can help your team navigate lending requirements in order to secure funding for your growth initiatives. 

Raising capital is essential to growing your portfolio, but understanding and meeting the needs of lenders is a complicated and time-consuming process. An outsourced CFO will have a wealth of industry expertise that allows them to identify partners, manage documentation, and negotiate lending terms in order to secure funding.

3. Your Team is Struggling With Investor Relations

CFOs understand exactly what investors are looking for when it comes to reporting and communications. 

It’s their job to ensure investors understand the financial side of your business, and the best CFOs are also excellent communicators. They possess the required leadership skills to run presentations and the interpersonal skills to effectively communicate with stakeholders. 

An outsourced CFO understands that strong investor relationships are an essential part of every growth strategy. Having a professional on your team who manages this complex set of tasks will prevent errors or miscommunications. 

4. You’ve Hit a Growth Plateau

There are many different reasons why your real estate portfolio may be struggling to grow past a certain point. Often, there are multiple obstacles at work that all work together to prevent a team from taking the next step. 

Outsourced CFOs can provide consulting services to identify problem areas in a business’s growth strategy. They can also develop systems and processes to improve weak areas in your operation’s infrastructure, provide strategic planning, identify growth opportunities, and offer investment strategy advice. 

The most significant benefit to hiring an outsourced CFO as opposed to an in-house alternative is that CFOs operating on an as-needed basis can design growth strategies to sustain beyond their direct involvement. They can work with you to implement strategies and teach you new processes so you will continue to benefit from their work for the long-term.

5. Your Team is Underperforming

Strategic leadership is one of the key differences between CFOs and other outsourced accounting professionals. Since CFOs possess a sophisticated understanding of all accounting processes, they are able to effectively manage a team of in-house or outsourced bookkeepers, accountants, and controllers.

They can perform these services on an ongoing part-time basis if your team requires active management. They can also perform as-needed audits on performance management in order to determine problem areas, develop new processes, and train employees.

Hiring an outsourced accountant to manage your team will result in more accuracy and efficiency at all levels of accounting.

6. You’re Experiencing Difficult Challenges

As a real estate investor, challenges are inevitable. Market changes and disruptions can cause chaos and uncertainty in your financial processes. 

Hiring an outsourced accountant allows your team to benefit from the precise solutions you need when you need them, making you more equipped to deal with obstacles and gain a competitive edge in the market.

The Benefits of an Outsourced CFO

Working with an outsourced CFO affords your team benefits that aren’t as accessible with in-house services. Here are some examples:

  • Saves you time: By outsourcing tasks on an as-needed basis, you’ll be able to focus your time on high-impact tasks.
  • Saves you money: Outsourcing CFO services means you’ll have access to a high-level skill set without having to fund a salary or employment package.
  • Unlocks hidden operational efficiencies: As-needed audits of your current financial processes and internal controls can reveal opportunities for enhanced efficiency, accuracy, and portfolio growth.
  • Allows you to seek specialized assistance: Outsourcing allows you to ensure the professional you work with is specialized in delivering solutions for your unique problem.
  • Flexible access to services: Outsourcing allows you to partner with highly-specialized and sophisticated professionals on an as-needed basis. 

Hall CPA: Your Real Estate Financial Advisor

The benefits of hiring an outsourced CFO make them an attractive option for managing your finances, organizing your team, and developing a strategy for portfolio growth. At Hall CPA, we help real estate investors save thousands of dollars annually by providing sophisticated accounting expertise and financial advisory services.

Hall CPA’s advisory services deliver all the benefits of an outsourced CFO. Our team of professionals offers strategic financial advice and gives you the tools you need to lower your taxes and grow your portfolio. 

Contact us to learn more about how our team can support you.