How accounting firms can ride the 'outsourced CFO' wave

The outsourced Chief Finance Officer (CFO) is fast becoming a popular service among SMEs with ambitions to grow but not enough funds to hire a full-time CFO. Outsourced can also mean a virtual CFO, sometimes called a "fractional CFO".  

These days, more and more accounting firms are redesigning their service model and stepping into the outsourced finance model. To make this possible, we’re seeing a rise in accounting practices turning to Airwallex.  

Using a single platform that seamlessly integrates with leading accounting software, Airwallex makes it easy for firms to make payments and manage client accounts. This is empowering accounting practices to offer value-added and evolved services to their small business clients. 

Against the backdrop of the rising demand for outsourced finance, Airwallex has gathered valuable insights from accounting practices on how they could make virtual finance services part of their long-term commercial strategy and how to go about it.  

Key advantages of offering an outsourced finance function to clients and how is it different from the traditional accounting relationship

Taking a leap into the world of outsourced finance delivers big gains to accounting practices. By working together on an ongoing basis, practices become more embedded in their client’s business. By making themselves ‘stickier’, their clients are more likely to stay active.     

Additionally, clients stand to make serious gains from virtual finance solutions offered by their accounting partners. They get access to expertise, experience, and resources in a cost-effective way, equipping them to scale. This can be particularly valuable for SMEs who need to boost their data reporting and financial modelling to improve their financial performance but may not have large budgets to buy complex solutions. 

Outsourced finance empowers business clients to scale flexibly, manage risk, and drive continuous improvement. And importantly, businesses can focus on their core activities. This makes them value accounting solutions significantly more compared to services that they reluctantly need, like core compliance work, for example.

Key challenges that come with providing an outsourced finance function

Typically, the biggest challenge for accounting practices is being crystal clear on their clients’ processes and sticking to them. Each client’s processes are different, so it's imperative to make sure accountants are trained to follow them to the letter. 

Offering an outsourced finance function goes hand in hand with a wider set of service-level agreements, so making sure that practices have the capacity to deliver accordingly is also critical. 

Another common challenge is misaligned expectations between accounting firms and their clients. Managing these carefully and making sure each side knows what to expect from their counterpart is also an enabler for success.

Businesses that benefit most from using an outsourced finance solution

Businesses that have a high volume of repeatable transactions and where the finance team has minimal contact with customers and suppliers lend themselves well to an outsourced finance function.   

Companies with cultures that focus on accountability and openness to change are also a great fit for outsourced finance solutions.

Ideal tech stack for accounting firms providing an outsourced finance service

While everyone has their preferred software solutions, the starting point should always be a General Ledger with a bank feed, which integrates with all of the following:

• Data capture tool so that clients can easily share invoices with their accounting practices.

• Expense management tool (if employees can claim expenses)

• Credit control tool that automates the follow-up processes.

• Payment tool that seamlessly links to the client’s account or wallet. 

• Reporting tool to prepare reporting packs.

• Forecasting tool to anticipate work needed and visualise future impacts of changes done today.

• Workpaper tool to easily document and review the on-going work.

• Project management tool so that teams can see what work is where. Granting access to clients enables collaboration as a team.

Accounting firms leverage Airwallex because it provides multi-entity accounts, global payment services, cards for expense management, and integrations with accounting software like Xero.

Other tips on how accounting firms can offer outsourced finance solutions to their clients

When presenting new ideas to clients, it's always a good idea to do as much research as possible so that it is clear how to deliver a virtual finance function. Every business has slightly different ways of working, so the way the concept of outsourced finance is communicated will impact the likelihood of it being adopted. 

Another tip is to walk before running. A good approach is starting small with a couple of elements of work that a finance team would do. Then, make sure these are running smoothly. Finally, build from there. 

An outsourced finance offering is likely to evolve as both client and vendor get more comfortable with the processes. The key is to keep the conversation going in both directions. 

How can Airwallex help?

Without embracing this sizable opportunity, there is a scenario in which accounting practices are outcompeted by those journeying into the world of outsourced finance.

By working with a global platform like Airwallex, accounting practices can become more valuable to their small business clients by empowering them to manage their global finances. 

Partnering with Airwallex brings access to tools, incentives, and resources to enter the realm of outsourced accounting solutions. 

Our global payments platform is built for accounting firms and seamlessly integrates with existing tech stacks. Learn more about how our Airwallex can help businesses scale. 

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