The decision to outsource CFO (Chief Financial Officer) has to be carefully considered by local businesses.
If there is one element that brands love, it is the ability to control operations in-house.
That drive for control can have a detrimental impact on the company however, overlooking many of the benefits that comes with contracting a specialist from the outside.
Here we will outline what the major incentives are for enterprises that seize on this opportunity.
Immediate Upgrade For Intellectual Property
The Chief Financial Officer is a position that requires a great deal of consideration when hiring a permanent professional. The resume has to be gleaned over carefully as numerous rounds of interviews are carried out. Even when the candidate has been selected, it will take them weeks and months to feel accustomed to the surroundings and learn the ropes of the organisation. One of the major selling points to outsource CFO is bypassing much of that deliberation and process, cutting right to the chase to upgrade the intellectual property. Whilst it can take them a few days to get a feel for the operating model, they will work to specified tasks and avoid any office politics that slows the company down.
Objective and Dispassionate Analysis
A bubble effect can be created when individuals operate within the four walls of an organisation for an extensive period of time. This is not so much a criticism of professionals who are loyal to a company, but a byproduct of working within the confines of a single environment. By opting to outsource the CFO, a brand can obtain objective and dispassionate analysis from a party that has a wider view of the discipline. Suddenly all of the relationships and friction between various departments and characters is gone, bringing in a fresh face who can simply look at the facts and offer data that has no strings attached. That is an attractive proposition and a key selling point for local outlets.
Identifying Market and Industry Trends
That bubble effect for internal operators can extend further for businesses that don’t choose to outsource the CFO, failing to identify trends within the industry on a micro level and the market as a whole on a macro level. If there is new technology that can expedite key processes, different couriers that offer a cut down price, local wholesalers who can give the same product at a lower rate or tax incentives that have not been utilised, they are opportunities for the outsourced professional to seize upon.
Time Management and Planning Improvements
Hiring an internal Chief Financial Officer ensures that a member of staff is managing their own tasks on company time. The move to outsource the CFO improves two key facets – time management and planning. On the first count, the new face will be undertaking the bookkeeping duties diligently without using any resources from within the business itself. Then they can take a wider perspective of the organisation at large, mapping out a financial strategy that delivers a sustainable business model for the coming weeks, months and years. Many small to medium enterprises (SMEs) can fall victim to short-term thinking and live hand-to-mouth, but these experts can offer a blueprint for growth that forecasts well into the future.
A Chief Financial Officer in the current market can demand quite the salary, dictating anywhere from $200,000 to $500,000 plus depending on the business and the industry. A major incentive for many brands to outsource the CFO is cutting that figure down tenfold, instead opting for a short-term contract that can roll onwards if key performance indicators (KPIs) are met. From small projects that offer a diagnostic for a 3-month period or a long-term rolling contract that continues a professional relationship, the terms are entirely set by the client.