How accountants 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.  

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

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

 Against the backdrop of the rising demand of outsourced accounting, we spoke to experienced CFO Kat Wellum-Kent from Fractional Finance. We asked her why accountancy practices should make virtual finance services part of their long-term commercial strategy and how to go about it.  

Kat, what are the key advantages of offering an outsourced finance function to clients? And how is it different from the traditional accounting relationship?

Kat: Taking a leap into the world of outsourced finance delivers big gains to accountancy practices. Firstly, by working together on an ongoing basis you’ll become more embedded in your client’s business. By making yourself ‘more sticky’, your clients are more likely to stay working with you (as long as you’re doing a good job!).     

Secondly, your clients stand to make serious gains from your virtual finance solutions. They’ll get access to your expertise, experience and resources in a cost-effective way, equipping them to scale. Imagine you have an ambitious start-up who needs to boost their data reporting and analysis to improve their financial performance. Or a scaling SME that needs help with financial modelling. 

This empowers your small business clients to scale flexibly, manage risk and drive continuous improvement. And importantly, they can focus on core business activities. This makes them value your services significantly more than if you were only providing services that they reluctantly need, like core compliance work. 

Thirdly, it’s good for your employees. Riding this emerging trend will pique the interests of your employees and make their workload more varied and interesting. That’s a big plus when it comes to retaining team members. 

What are the key challenges that come with providing an outsourced finance function?

Typically the biggest challenge for accountancy practices is being crystal clear on your clients’ processes and sticking to them. Each clients’ processes are different, so you need to make sure your team is trained to follow them to the letter. 

Be aware that offering an outsourced finance function goes hand in hand with a wider set of service level agreements. Make sure you have a team set up that has the capacity to deliver in line with these. 

Another common challenge I hear is misaligned expectations between accountants and the client. You’ll need to manage these carefully, making sure each side knows what to expect from the other. Putting in place an accountability process helps each party stick to the plan.  

Which businesses 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.   

If we’re talking about how to choose which clients to offer this new model of finance to, the key determinant of success in my experience is a company culture that focuses on accountability and openness to change.

What’s the ideal tech stack for accountants 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 the client can easily share invoices with you.

• Expense management tool (if employees can claim expenses)

• Credit control tool that automates the chasing process.

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

• Reporting tool to prepare reporting packs.

• Forecasting tool

• Workpaper tool so you can easily document and review the work you’re performing.

• Project management tool so that the team can see what work is where. Consider giving the client access too, so you can work as one team.

Accountants recommend Airwallex to clients because it provides multi-entity accounts, global payment services, cards for expense management and integrations with accounting software like ApprovalMax and Xero.

What tips can you share on how accountants can offer the best outsourced finance solution to their clients?

First up, do your research so that you’re really clear on how to deliver a virtual finance function. Then communicate your offering repeatedly to your team and to your clients, but be selective with those you offer it to. 

Another tip is to walk before you can run. Start with a couple elements of work that a finance team would do and make sure these are running smoothly. Then build from there. 

Your outsourced finance offering is likely to evolve as you get to grips with the processes. That’s fine; the key is to keep the conversation going both internally and with your clients. 

What additional services does Fractional Finance offer outside of core compliance and tax services?

We’re solely focused on providing a fractional finance team to clients. Our virtual finance services include systems set-up, data processing (also called bookkeeping), credit control, supplier payments, month-end close, management accounts, and building budgets and forecasts. We also give strategy and leadership support through a virtual CFO. 

Why partner with Airwallex?

Without embracing this sizable opportunity, accountancy practices will soon be outcompeted by those journeying into the world of outsourced finance.

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

Partnering with Airwallex gives you access to all the tools, incentives and resources you need to enter the realm of outsourced accounting solutions. 

Our global payments platform is built for accountants and seamlessly integrates with your existing tech stack, as well as offering unique benefits for your practice. 

Learn more about how our partner programme can help your business scale.