CFO Outsourcing (The Good, The Bad & The Ugly)

A company's success of failure can come down purely to the senior management team, with rising costs and increasing pressure on company finances, especially in light of the recent 2024 budget there is an increasing need to determine if this is an area that can be streamlined and ensure effective procedures.

There is a lot of fear around outsourcing senior management roles, and rightly so, if your appoint the wrong firms to provide such services could prove disastrous for a company, however the same can be said for employing the wrong full-time CFO.

There are a few key points to consider when seeking to outsource a CFO function that can help you decide if it is appropriate for your firm and if the consultant if the right fit for you, it is crucial to consider these point in the decision making process.

1. Location

Ensure that the firms you are working with in based in the same region as your business, this will ensure a good understanding on local and national business trends and well as financial development in the region. This can be crucial in certain conditions.

2. Operations

   Many outsourcing firms outsource their analysis work to 3rd party offshore companies, this can be extremely risky, your firms is then dependent on foreign security policy to ensure your data is safe, when picking a provider it is always important to ensure that work is kept in-house in compliance with security standards.

   
   

3. Need

   It is important to know what your company requires from a CFO function, many companies assume that they need one simply because they have reached a certain size. However if there is no tangible benefit to having the CFO function this is a sunk cost. Your company must benefit from having even an outsourced CFO. Quite often this can be a benefit such as cash flow strategy, or even strategic financial planning (ensuring the company is on top of upcoming obligations and expenditures).

   
   

4. The Firm

   Being an ACCA or an accountant does not automatically qualify someone to be a CFO, at KABSYS our staff who provide this service are all Chartered Professional with MBA's from top schools. This is combined with years of experience across financial and management spheres. Whoever you choose to handle your CFO function should have the basic qualifications married wtih experience at board level in order to effectively represent your business.

We hope this gives you an insight into the importance and factors to consider when setting up your companies CFO function. If you have any queries please do not hesitate to get in contact and one of our partners will arrange a consultation.