Small and medium-sized enterprises (SMEs) are the backbone of the Australian economy—accounting for 97% of all businesses and contributing approximately 32% to the national GDP. Yet despite their vital role, many still face ongoing challenges with growth and long-term survival.
Nearly half (49%) of all businesses launched four years ago have since closed their doors. In 2023-24 alone, 436,018 new businesses entered the market, while 362,893 exited. That’s a 16.8% entry rate and a 14% exit rate—and the vast majority were SMEs.
These figures highlight a real and growing need for strong financial leadership and strategic planning. Reliable accounting ensures compliance and accuracy, however, it often stops short of providing the strategic advice needed to drive long-term success. That’s where a Chief Financial Officer (CFO) adds real value.
Unfortunately, many SMEs still see a CFO as a luxury or something to consider only in a crisis. In reality, a CFO should be seen as a strategic investment, not an overhead. A CFO can help prevent problems before they arise, offering proactive insights and guidance to keep the business on track.
Outsourcing the CFO role is a practical and cost-effective way for SMEs to access expert financial guidance. By engaging our experienced team, SMEs gain the financial insight, strategic direction, and support they need to grow with confidence.
What Is an Outsourced CFO?
An outsourced CFO works with a business on a part-time or project basis, providing strategic guidance without the cost of a full-time executive hire. They assist business owners with making confident decisions about the future, from budgeting and forecasting to cash management, long-term planning, funding preparation, and risk management.
Equil Advisory’s outsourced services help SMEs not just survive, but thrive. Our CFOs work alongside management and accounting teams to offer a complete financial solution, helping SMEs plan, prioritise, and protect their business as it grows.
The Affordability Advantage
Hiring a full-time CFO is an expensive undertaking. That, plus the perception only large companies need one, often deters SMEs from getting much-needed financial leadership. This is where the benefits of outsourcing can be fully realised. Outsourcing financial management is a smart way to manage costs while accessing CFO-level expertise. Instead of committing to a full-time executive hire, SMEs can bring in an outsourced CFO on a flexible, project, or part-time basis for budgeting, forecasting, restructuring, cash flow management, or funding preparation.
Many SMEs recognise financial management as critical to success, yet still operate without the strategic support they know they need. Outsourced CFOs fill this gap, providing vital financial insight and leadership in an affordable, scalable way.
Improved Cash Flow Management
Cash flow is one of the most common, and most critical, pain points for SMEs. Many fail, not because they’re unprofitable, but because they run out of cash. In fact, industry estimates suggest around 50% of businesses that close their doors were still profitable on paper. The Australian Banking Association has likewise found that poor financial management is among the top reasons small businesses fail. So these aren’t abstract risks. They’re real, structural issues that can unravel a business even when sales look healthy, and they serve to highlight just how essential it is to manage liquidity, not just bottom-line profit.
An outsourced CFO brings the experience needed to identify cash flow blind spots before they become business-ending problems. From cash flow forecasting and spend control to payment strategies and buffer planning, a CFO helps keep the business liquid, adaptable, and ready to weather whatever the market throws at it.
Strategic Financial Planning
Strategic financial planning isn’t just about understanding the numbers. It’s about using them to chart a viable, sustainable future. This includes interpreting profit and loss statements, balance sheets, and cash flow forecasts, then using that information to guide decision-making over the next 6, 12, or 36 months.
Partnering with an outsourced CFO provides strategic insight and long-term planning support. They help determine which financial indicators matter most to a business and build an actionable plan around them. Whether it’s setting growth roadmaps and targets, developing pricing strategies, or running scenario modelling, a CFO ensures financial decisions are based on real data and tied to meaningful goals.
Risk Mitigation and Compliance Support
Not all business risks are loud or obvious. Some are silent and systemic. Compliance breaches, misreported financials, tax liabilities, or weak internal controls may only come to light during an audit or regulatory review. But these kinds of issues can erode a business slowly, often without the owner even realising.
For SMEs with lean teams, keeping on top of everything may feel impossible; however, the consequences of letting things slip can be business-ending.
An outsourced CFO adds real value here. They don’t just support compliance but provide the strategic oversight needed to spot issues early, from regulatory gaps and audit exposure to director liability risks. It’s about building financial governance frameworks that improve accuracy, reduce risk, and give business owners peace of mind.
Scalability
Business growth rarely follows a straight line. One quarter a company might be hiring and expanding, the next they’re restructuring or cutting back. Revenue surges can be followed by flat periods. Markets shift, product lines change, and financial priorities move with them.
Without adaptable financial leadership, these shifts can leave a business exposed, especially in today’s volatile economic environment. For instance, according to the Australian Securities and Investments Commission (ASIC), during the nine months from July 1, 2023, to March 31, 2024, 7,742 companies entered external administration, marking a 36.2% increase compared to the same period the previous year. Many of these weren’t failing businesses, just businesses that couldn’t adjust fast enough.
An outsourced CFO gives SMEs the ability to scale their financial support up or down as needed. Whether the business is growing quickly or tightening belts, an outsourced CFO can align their involvement with current demands, providing strategic input during complex transitions without locking in full-time overhead.
Investment Preparation and Funding Readiness
Securing funding, whether for debt financing, equity, or grants, needs more than a good pitch deck. It demands solid financials, accurate forecasting, and a realistic investment return plan. Again, many SMEs can struggle to handle this process without assistance.
An outsourced CFO is the ideal professional to help SMEs become funding-ready. They will prepare due diligence materials, identify funding pathways, and ensure financials are accurate and credible. An outsourced CFO will also advise on valuation, capital structure, and negotiation. Essentially, their support improves funding outcomes and also signals to investors that financial governance is in place.
Real-World Impact: A Case in Point
A regional manufacturing SME faced with shrinking margins and escalating costs engages an outsourced CFO to assess their financial position. To address their issues, the CFO implements cost tracking, improves pricing structure, identifies unprofitable lines, and negotiates better supplier terms.
Within 12 months, they were able to achieve:
- A 12% reduction in production costs, achieved through process optimisation and strategic supplier negotiations.
- An 8% increase in profit margins, resulting from improved pricing strategies and the elimination of low-performing products.
- Enhanced working capital, facilitated by better cash flow management and inventory control.
- Implementation of a formal reporting cycle and KPIs, aligned with strategic goals, providing clearer financial insights and decision-making frameworks.
These outcomes equip the business with a solid financial foundation to confidently support its next phase of growth.
Signs an SME Should Consider Outsourcing the CFO Function
Waiting until a crisis hits before seeking experienced financial support is not a good business policy. SMEs should consider it well before that point. A good sign is when financial decisions start being made without the support of reliable, informed data.
Other common signs may include:
- Rapid growth without proper controls
- Ongoing cash flow problems
- Inconsistent, unreliable, or delayed financial reports
- Compliance or governance concerns
- Lack of strategic financial direction and clarity
- Preparing for funding or investment
- Expanding into new markets or product lines
Supporting Long-Term, Sustainable Growth
At Equil Advisory, we’ve seen firsthand the impact outsourced CFO support has on our clients, particularly during times of volatility. For many, it has meant the difference between reactive decisions and proactive planning. With the right financial leadership and ongoing CFO support, businesses gain stability, strategic direction, and the confidence to move forward with clarity.
For SMEs navigating growth or financial complexity, outsourcing a CFO function is a cost-effective and flexible solution. It brings financial experience, structure, and clarity without the overhead of a full-time hire.
If your business is facing financial complexity or uncertainty, now is the time to bring expert guidance on board. Our expert outsourced CFOs work alongside your team to deliver structure, clarity, and strategy when and where it’s needed most.
