Building an Outsourced CFO Tech Stack to Eliminate Bottlenecks

Updated: Jul 25

A business’s success depends on its financial health, and the modern day Chief Financial Officer (CFO) is its owner. Many businesses turn to outsourced CFOs to monitor their financial stability. Outsourced CFOs offer companies the expertise and experience of a seasoned professional without the cost of a full-time position. A solid outsourced CFO tech stack is needed to meet the demands of today’s business customer.

Businesses seek out an outsourced CFO to help overcome financial challenges and achieve growth. An Outsourced CFOs can help by addressing concerns in the following areas:

Cash management
Financial modeling
Improving profit margins
Cutting expenses
Updating financial systems and processes
Optimizing budget
Navigating audits

To provide these services, it’s critical for an outsourced CFO to be able to collect clean financial data from the client and be able to analyze it quickly. Because an outsourced CFO isn’t involved in the day-to-day operations of the business, and sometimes doesn’t have access to all the systems utilized by the business, this makes this task even more difficult.

This causes two bottlenecks to deliver value to their clients:

1. Collecting the data – Waiting for the client to send financial statements, general ledger information, invoice/bill summaries, etc. or pull all these reports themselves so they can start step 2.

2. Analyzing the data – Working with the information provided to put it into a format that is easy to work with (typically Excel) and analyzing the information to provide the service and prepare reports or deliverables.

Outsourced CFOs managing these responsibilities across multiple clients can become quite the challenge. However, by building a solid tech stack of tools that help streamline the data collection and analysis process, outsourced CFO departments can scale their practice, provide accurate and timely advice to clients, and even alleviate stress in their top talent.

Assessing Financial Accounting Tools

There’s no shortage of tools available for outsourced accounting teams, and selecting the right financial accounting tools can be an arduous task. The ultimate goal for your Outsourced CFO tech stack is to save time, reduce overhead costs, increase margins, and improve outputs from your team.

When evaluating your tech stack, consider:

Are you automating repetitive tasks?
Are your tools saving you time or creating unnecessary steps?
Is your team able to focus the majority of their time on analysis that will yield the most value for clients?
Is the client data you’re working with clean and accurate?
Can your tools integrate and work together or are you creating needless silos?

When building your tech stack, know that the tools you are already using may not need to be replaced. For example, Excel remains essential for finance professionals. Instead of trying to replace it, look for ways to make it easier to use, like eliminating manual data entry or ensuring that the rest of your CFO tech stack can integrate with it.

The Outsourced CFO Tech Stack Must-Haves

While every firm has its own unique set of challenges and needs, advances have made certain types of financial analysis tools a necessity in building a solid technology strategy. Here are some ideas where you can get the most bang for your buck in building your tech stack:

1. Data Gathering

The CFO role can be inflicted with manual, repetitive tasks, many of which involve the CFO painstakingly pulling reports so data can be analyzed.

An outsourced CFOs best bet for gathering data is using a tool that connects directly into the accounting system. Thankfully, there are many applications today that have this functionality. Some connect directly to the system to build dashboards and provide visualizations on a recurring basis (like Fathom or Jirav), and others offer one-time or recurring connections that export information into ready-to-use Excel workbooks (like Strongbox).

The critical point here is to use a tool that offers this connection, so you (or your client) do not need to spend hours pulling reports. This way, the CFO can go straight to reviewing the data, finding areas of improvement for the business, and providing a deliverable to their client.

2. Financial Analysis

Although tracking the same metrics, ratios, and trending financial data is useful on recurring basis so clients can compare themselves to past performance and peers (see Recurring Financial Dashboard below), an outsourced CFO often has to perform deep-dive analysis on the data to:

Complete an ad hoc analysis with a specific goal (i.e., profitability by different skews, individual customers, locations)
Identify the individual transactions or series of transactions that caused a particular fluctuation or anomaly in the data
Find out what needs to be tracked on an ongoing basis as part of a financial dashboard

To do this, Excel continues to be king because of its flexibility. When evaluating financial analysis tools, make sure that you can quickly, extract the information into clean data tables that are easy to work with.

3. Recurring Financial Dashboard

A financial dashboard is a way to keep all of a business’s financial information in one place, making everything visible. Business visualizations help to spot anomalies and can contribute to predictive analytics. As an outsourced CFO, sharing financial insights with the client can be difficult, especially if the financial experience of the client isn’t strong. Financial dashboards are a great way to provide clear visuals that can help demonstrate the findings you uncover.

Setting up a financial dashboard can be a cumbersome process. Clean data is key (see above how tools like Strongbox can help in this area by instantly gathering and processing the data so that it’s ready to be imported into your dashboard.) However, once the dashboard is set up, there’s very little learning curve in being able to use it effectively.

The challenge with most dashboard applications is that they offer “canned” calculation and visualizations that don’t allow the outsourced CFO the flexibility needed to customize the information for specific clients. When evaluating dashboarding tools, make sure that this flexibility is offered and that you can extract all of the underlying data into Excel so you can perform analysis described in No. 2 above.

Get the Data Gathering and Analysis Tool Your Team Needs

Strongbox integrates with the most popular accounting software and ERPs, making it an easy solution for any outsourced CFO practice. Your clients will benefit from the time saved gathering the needed information and the faster insights your team will be able to glean from the processed financial data. To provide your team with maximum flexibility for analysis, creating dashboards, and other requirements, Strongbox produces customizable Excel workbooks.