Every business needs a financial plan to meet its growth expectations, including physician practices. An outsourced CFO service can help you stay on top of your finances, so that you can focus on your core business activities. Outsourcing your CFO is a smart way to ensure that your company's finances are optimized and aligned with the business objectives. It also saves you time and money by having someone who can help with reporting, facilitate discussions with your accountants about your results and taxes, explain concepts, and provide you support and information so you can make better decisions. To learn how outsourcing your CFO work can strengthen your business, read on!
Why hire an Outsourced CFO Firm (also known as CFO Advisory and Consulting Services)?
A strategic CFO sees the big picture of your financial situation – in real-time. The 50,000 feet altitude picture, which is what’s needed at this point in the game to get through this year. From this birds-eye view, a CFO can analyze your 2021 monthly financial trends, quickly forecast or update your 13-week cash flow, and help you map out a 2021 strategy and its corresponding financial forecast for the rest of the year.
When you are knee-deep in your own operations, someone on the outside looking in provides a new perspective and insight into your best next moves. If you are stalled in your decision-making process, a CFO can run multiple scenarios. Every business needs a financial plan to meet its growth expectations, including service companies. To learn how outsourcing your CFO work can strengthen your oilfield, pipelines, electrical, engineering or construction company and projects, read on! Scenarios to see what the financial impact would be with each case. Or dive into P&L details and operations to generate recommendations for revenues. An outsourced CFO also offers:
Medical billing and collection trends you need to watch and when to take actions to protect operating cash
Opportunities your organization can take to creatively reduce costs
Strategies to squeeze the cash conversion cycle from both ends (getting accounts receivable paid faster)
Assess your lending or equity investor situation for ways to inject more cash
Not all Outsourced CFO services are the same – here’s what you need to know
As good as this all sounds, it’s important to note that not all CFO services operate the same way. Many firms offering these services provide a one-size-fits-all-CFO-service focused on your accounting or Controller Services. They are kind of like an “accounting factory” if you will.
These operations generally charge a fixed price that includes an agreement on how and when the work is performed. Essentially, they aim to standardize the widgets. It’s easy to recognize because they’ll outline things such as the number of “touchpoints” or limit discussions with you to a 30- minute monthly meeting (to keep their costs low and profit high).
Companies involved in medical practices, health-tech, and software-as-a-services billing whose business processes are fairly routine could work under this model because their businesses are relatively standardized. But this isn’t the case for early-stage life sciences, biotech, and medical device manufacturing companies where operations are more complex.
The Healthcare CFO has developed a Medical Practice CFO package that looks at monthly or quarterly cash flow, financial performance, and even analyzes financial data from your EHR revenue cycle and medical billing provider (ex. Athenahealth). The package was designed with physician/owners in mind, it targets the cash flow challenges they face, and is helps them run successful practices so they can put back cash in their pockets.
What to look for in an Outsourced CFO Service
If your business model doesn’t fit with the one-size-fits-all type service (which most life sciences, biotech, and device manufacturing companies don’t), you should look for a service with a more customized approach.
An outsourced CFO or CFO advisory and consulting service should target finance disciplines – which is future-focused yet builds on historical backward-looking accounting and help you make decisions about the business in this dynamic and ever-changing landscape. He or she can find ways to shrink the cash conversion cycle (which is critical right now) and deliver advanced corporate finance services, including:
Financial Planning and Analysis
Business Processes and Internal Controls
Capital funding – be it securing debt or equity
CFO Services should be based on client needs and requests
The bottom line is, your business doesn’t fit into a one-size-fits-all box. And your outsourced CFO shouldn’t attempt to put it in one. Look for a CFO firm that custom tailors its services to your business in areas such as:
Sales nuisances (medical billing, outsourcing revenue management and collections, Medicare and insurers)
Cost activities and complexity
Manhours (shift work for medical device manufacturing, physician hours, lab and clinical hours)
Procurement or supply activities
Chemicals mixing, Cellular growing, and product manufacturing
The Healthcare CFO offers a white glove customized CFO Service
At The Healthcare CFO, our approach to outsourced CFO services is a win-win policy with your best interests in mind. It’s intentionally designed to wrap around your accounting or Controller Service provider, whether it’s in-house or outsourced.
Our definition of traditional CFO work comes from the corporate finance world where our team is trained in areas such as:
Establishing corporate governance or institutionalizing the company
Advising and presenting to company boards
Corporate and Business Unit Planning
Corporate Finance adapted for smaller businesses and practices – or entrepreneurial finance
Financial Planning and Analysis (budgets, forecasts, and financial modeling)
Controllership (covers Accounting, Tax and Internal Controls)
Operational P&L (running and working in the business, understanding drivers of the P&L, connecting the dots between operations and finance)
Working with us means you only pay CFO Rates for CFO work. Our approach leverages the work performed by your accountant and ring-fences the finance work that our experienced energy finance team performs, to assess your financial situation from a big picture, birds-eye view – and move forward.
Now, we do still need the numbers from your accountant and it’s not unusual for our CFOs to make accounting and tax recommendations to you and your accountant (our CFOs have both finance and accounting backgrounds). If you don’t have an accounting provider and need one, we can recommend one of the firms we have developed relationships with through our Strategic CFO Alliances or find one that meets your needs.
We encourage you to do your research on this topic. The Healthcare CFO and its award-winning parent, The Energy CFO, have a reputation for providing excellent and affordable on-demand service to our clients. For more about our customized client service approach, check out our Services page.