Outsourced CFO services: what's included and when they fit

Outsourced CFO services are the forward-looking side of finance, bought from an outside provider instead of a full-time hire: cash forecasting, budgets, monthly reporting, board materials and decision support. They do not usually include bookkeeping, tax preparation or audit, which stay with the bookkeeper and CPA.

The role itself, and how it differs from a controller or a full-time CFO, is covered in the guide to what a fractional CFO is. This post is narrower: what actually goes on the service menu, who tends to deliver each piece, and how to scope an engagement that fits.

What an engagement includes and excludes

An ongoing outsourced CFO scope usually covers five recurring jobs:

• Cash. A rolling cash forecast, often a 13-week cash flow forecast, and a runway number leadership trusts.
• Planning. The annual budget and a forecast that gets updated as the year moves.
• Reporting. A monthly package with budget versus actual, agreed metric definitions and commentary.
• Board and lenders. Decks, investor updates and covenant reporting.
• Decisions. Modeling a hire, a price change, a new location or a large contract before the company commits.

Three things usually sit outside it. Bookkeeping (recording transactions, reconciliations, the month-end close), tax (returns and tax planning) and audit or review work belong to other specialists. Decipher, for example, does not do bookkeeping or tax and works alongside the client's existing bookkeeper and CPA.

Between the two sits project work: a raise, a sale, an acquisition or a finance systems overhaul. Most providers price these separately because they are intense for a few months and then stop.

Who usually provides each component

The pattern to notice: the outsourced CFO depends on everything above the cash forecast row being done on time. If those rows are weak, the CFO's hours go into cleanup instead of planning.

Two delivery models

A firm that bundles CFO work with accounting. One provider handles the books, the close, sometimes tax, and a CFO layer on top. The benefit is a single relationship and one set of systems. The thing to check is how senior the CFO layer really is and how much of the fee pays for it versus transaction processing.

A standalone senior CFO. A senior finance leader, or a small firm of them, who plugs into the bookkeeper and CPA the company already has. The benefit is direct access to the senior person and no need to change providers that work. The thing to check is capacity and how they handle a weak close. The trade-offs between firms, independents and marketplaces are laid out in how to choose a fractional CFO.

How to scope an engagement

A good scope names deliverables and dates, not hours. Work through four steps:

1. List the recurring outputs and how often each is needed.
2. Set the calendar: when the close is done, when reporting lands, when the board meets.
3. Separate projects such as a raise or sale, with their own deliverables and end date.
4. Name the owner of each input, especially the close.

A worked example for a company with a quarterly board:

Illustrative figures, not client data.

Writing it down this way makes proposals comparable: two quotes for the same 69 deliverables can be judged on who does the work, not on vague promises of "strategic support."

When outsourcing the CFO seat fits, and when it does not

It fits when the company needs senior judgment part of the month: a recurring forecast and reporting rhythm, a board or lender to answer to, and a few big decisions a year. It also fits as a bridge before a full-time hire. For how Decipher scopes and runs this work, see its fractional CFO services.

It does not fit when the books are still unreliable (fix the close first), when the finance team needs a manager every day, or when the volume of entities, deals and stakeholders fills a full-time role.