Outsourced Financial Services: Elevate Your Finance Strategy

Outsourcing your startup’s financial services is an ideal way to ensure you have access to high-quality support at a fraction of the cost of bringing such services in-house on a full-time basis. Financial services outsourcing is an approach that aligns with growth-focused startups and can scale and grow with your startup as it evolves.

Modern Outsourced Financial Services: Beyond Traditional Bookkeeping

Outsourced financial services extend far beyond basic bookkeeping to more advanced offerings. Here’s a closer look at the outsourced financial services that can help your startup flourish.

Outsourced Bookkeeping Services

Graphite Financial is your startup’s one-stop shop for all your outsourced accounting and bookkeeping services. Some of the key tasks that an outsourced bookkeeper can perform for your startup include:

• Transaction recording
• Account reconciliation
• Payroll management
• Financial reporting
• Tax compliance
• Data entry

Some of the key benefits of outsourcing such services rather than attempting to have current staff do it include accuracy and efficiency improvements. It’s also much more cost-effective to outsource these services than to bring a bookkeeper in-house.

Accounts Payable and Receivable Outsourcing

Invoice processing, payment execution and collections are all key tasks that an outsourced professional can perform related to accounts payable and receivable. Key benefits include optimizing collections and improving cash flow. Outsourced financial professionals often implement fraud protection strategies and control mechanisms to safeguard your startup.

Outsourced Controller Services

Controllers help with financial oversight and compliance. They also perform bookkeeping tasks, payroll, financial reporting and can assist with budgeting. Based on this, controllers can often identify ways to improve financial processes and provide guidance on strategy and decision-making.

Outsourced Financial Analysis

Outsourcing financial analysis largely involves crunching numbers so startup leadership can make better, more informed decisions on the future. It involves tracking and focusing on various key performance indicators (KPIs), such as:

• Profit margins
• Return on equity
• Return on assets
• Cash flow
• Customer acquisition cost
• Customer lifetime value
• Burn rate
• Churn

These metrics provide critical insights into your startup’s financial performance, helping leadership improve business operations and improve your organization’s financial health.

Outsourced Financial Planning and Forecasting

Financial planning and forecasting is a more advanced skill set that can be outsourced to a qualified professional. Some of the tasks that this professional will cover include:

• Budget development and management
• Scenario planning and sensitivity analysis. To adequately plan, a professional will run scenarios based on the best-case scenario, worst-case scenario and most likely scenario.
• Cash flow forecasting and cash flow management
• Strategic planning

Outsourced Payroll Processing

Payroll is a big part of any startup, and this important task can be outsourced to a qualified professional. A good financial partner will do more than just process payroll, but file taxes, comply with various industry standards and regulations, and integrate payroll services with HRIS and existing accounting systems.

Outsourced Tax Preparation and Planning

If your finances aren’t organized, it’s more likely to lead to mistakes and potentially even penalties. Tax preparation and planning services are other services that your startup can outsource to a qualified professional. A good professional will have a tax plan and an optimized strategy. They’ll also handle multi-jurisdiction situations and international tax support. They can also support your startup in the event of an IRS audit.

Comprehensive Finance and Accounting Outsourcing

At Graphite, we offer an entire finance department, with professionals on hand who can handle everything from basic bookkeeping to advanced financial strategy. These strategic partnerships allow your startup access to high-level financial expertise at a fraction of the cost of what it would be to bring a professional in-house. Our team is equipped to provide not only financial planning but also accounting services that ensure accuracy, compliance, and clarity in your financial operations.

Strategic Benefits of Financial Services Outsourcing

Outsourcing financial services comes with more benefits than just cost savings. When you work with a financial partner, you’re able to tap into years of expertise and specialized industry knowledge. What’s more, a financial partner can scale with your startup as it grows and position themselves as a long-term strategic asset. They can also provide critical support in monitoring and improving your startup’s overall financial health.

Cost Efficiency and Resource Optimization

Cost savings is a significant factor in deciding whether to hire a professional in-house versus outsource the service, especially for startups that have limited capital. For instance, the average salary for a bookkeeper is anywhere from $44,000 to around $60,000. CFO salaries are usually several hundred thousand dollars per year. At Graphite, our service packages start at $1,250 per month — and you also won’t have to pay benefits.

Finance Outsourcing Models: Finding Your Optimal Structure

There are various ways to approach financial outsourcing. For instance, you can outsource your entire financial department and its operations to a qualified professional, which many startups do as they enter a growth period. However, as startups mature, many tend to take a more hybrid approach. That is, they outsource some financial activities while maintaining a certain level of in-house financial leadership. This approach allows in-house professionals to focus more on the day-to-day needs and outsourced professionals to zero in on more strategic needs and handle special projects.

Determining Which Finance Functions to Outsource

So, how do you decide which financial functions to outsource and which ones to keep in-house? When you get to this point, consider keeping core financial activities and more of the day-to-day tasks in-house and outsourcing anything that may require more specialized expertise.

Organizations That Benefit Most from Finance Outsourcing

Any type of organization can benefit from outsourcing some or all of its financial operations. However, some can benefit more than others. Here’s an overview of those that can benefit most:

• Early-stage startups that are entering a growth phase or nearing a fundraising round
• Startups that are growing rapidly and need guidance with risk management
• Organizations that are transforming or restructuring
• Startups experiencing financial challenges

Signs Your Organization Should Consider Finance Outsourcing

Some of the signs that could indicate a need for external financial help include:

• Rapid growth and the inability of startup leadership to effectively manage the finances any longer
• Experiencing financial reporting delays and compliance issues
• In-house talent and capability gaps
• Difficulties with effectively scaling

Technology Enablers in Modern Financial Services Outsourcing

Today’s advanced technologies help make outsourcing financial services more convenient than ever. Cloud-based solutions and accounting platforms allow leadership to view real-time financial data anywhere and at any time, while also permitting transparency and enhancing collaboration. Automation and AI also play a role in financial management, as these advanced technologies can streamline certain tasks and tap into historical data to help startups make faster and smarter decisions.

Data Security and Compliance in Finance Outsourcing

Data security and regulatory compliance are also key considerations in financial management. At Graphite, we take data security very seriously. Our internal security team is always working to ensure that any data we work with remains safe and secure so you don’t have to worry about it falling into the wrong hands.

Industry-Specific Financial Outsourcing Solutions

At Graphite, we’ve partnered with hundreds of startups throughout various industries to help them grow and prosper. We’ll pair a professional with experience in your industry to offer even more value to the partnership. Our financial experts have experience in industries including SaaS, eComm, HealthTech, CPG and more.

The Financial Outsourcing Implementation Process

When you work with Graphite, we’ll make the transition to working with our professionals as easy and seamless as possible. We pair an onboarding manager with every new account to help get things going quickly so that we can begin delivering value for your startup faster. Graphite will manage any transition so that you don’t have to.

Managing a Successful Outsourced Finance Relationship

A good outsourced financial relationship is based on trust, transparency and effective communication. Some of the best practices for working together with an external partner include:

• Establishing a regular communication cadence
• Detailing expectations and identifying what key financial metrics you want to track
• Discussing escalation and how to handle any problems
• Having both short and long-term goals

Selecting the Right Outsourced Financial Services Partner

Selecting the right outsourced financial partner is a lot like selecting any strategic partner — it’s important to weigh a mix of tangibles and intangibles. For instance:

• Consider experience and expertise
• Look for various advanced qualifications or criteria
• Seek a professional with experience in your industry
• Be sure to assess cultural fit and overall comfort

Transform Your Financial Operations with Strategic Outsourcing

Aside from cost effectiveness, outsourcing your financial operations is an opportunity to form a strategic partnership with a qualified expert who can help take your startup to the next level. For more information on the value of strategic outsourcing, contact Graphite today to schedule a consultation.

FAQs

How long does it typically take to transition to outsourced financial services?

With the right onboarding strategy, this transition can take as little as a few weeks.

How will outsourcing affect our financial control and oversight?

With the right partner, outsourcing can enhance your control and oversight by streamlining processes and improving accuracy while allowing you to focus on important core business activities.

What level of involvement is required from our internal team?

Internal teams should be actively involved in overseeing this relationship and may also retain some responsibility in certain areas.

How do outsourced financial partners handle sensitive financial information?

Good partners prioritize data security and confidentiality and have a protocol to safeguard sensitive information.

Can outsourced financial services scale with our organization’s growth?

Absolutely. That’s one of the most significant benefits of working with outsourced CFO services — they can grow and evolve as your startup does.

What technology platforms do you integrate with?

Our programs can integrate with most existing technology platforms to offer more value to our partners.

How do you handle industry-specific compliance requirements?

Our professionals have experience across a variety of industries and know the unique compliance requirements that must be met. We make this a part of our service.

What happens if we decide to bring financial functions back in-house?

While we aim to serve as a long-term partner, we’re here to assist you with your financial management for as long as you need it, and we will help with any transition back to full in-house operations.