Why Outsourcing Your CFO is 30% Cheaper

September 10, 2015

Why Outsourcing Your CFO is 30% Cheaper

Connect with Service Provider

Get connected within 24 hours to pre-screened, trustworthy and small business friendly service providers for Services in top Indian cities

With the change in the business scene, businesses have altered their way of practicing business entirely in a new profound way. Everything is outsourced and can be managed without hiring permanent resources. Indian companies whether small or big can now have a CFO- Chief Financial Officer on call to do company law, financial reports, financial strategies, financial advisory  to fund raising, says Arijit Barman and Biswarup Gooptu.

Outsourcing CFO services is a growing trend. However, definitive statistics on the use of outsourced CFOs are hard to come by in a country like India, but there are few factors that are encouraging companies to embrace this strategy.

Outsourced CFO & Contoller

Image courtesy:kernaccounting.com

A CFO continues to be viewed as someone to be an “insider” to an organization that he/she works for. The number of experienced CFO’s available is not proportion to the number of companies that have mushroomed, grown  and in few cases have become larger organizations.

Outsourcing in recent years has given small and medium sized companies an option to bring on board a good quality CFO skill sets who could fit in.

A Unique Approach

Providing experienced and qualified CFO talent on a part-time or an outsourced basis at a fraction of cost of a full time employees is what these days companies are doing. Their CPAs work as a team member with in a company, which helps an organization to immediately address the pressing financial concerns, mentoring and help in making important decisions. This unique approach of outsourcing CFO services has been growing vigorously in India, especially in small businesses as affording a CFO salary is a biggest concern.

What Is The Cost To Hire Outsourced CFO?

Generally, the cost is the function of business scale and growth aspects. The cost varies from per man day in case of specific on-site assignment OR in the form of fixed monthly retainership kind of assignments with on-site & off-site presence with typical lock-in of six months to one year to start with to serve the business as shared CFO.

Fund raising mandates or any other strategic services mandates not covered under shared CFO. They are being charged based on certain % points depending upon challenges & work involved on the transaction amount or on fixed fee basis.

What’s In For The Companies?

About a dozen such on call counselors have sprung up recently like, here is this “MyCFO”, “Elevate” “Visiting CFO”,  “CFO4U”, “Amplus Consulting” and “Alamak Capital”. Also, some of the traditional accounting firms have diversified into this space. “While demand is  less compared to the west, it is been picking up here as well,” says MK Tyagi, partner at Bangalore-based MK Tyagi & Co.

bar_graph2

Image courtesy:thecfoshop.com

Outsourcing is 30% cheaper than hiring an experienced full-timer. MyCFO’s retainer fees ranges from Rs 1.5 lakh-7 lakh a month, with 20-25% of it linked to milestones. Typically, such engagements are for time-bound projects. While the sweet spot remains six months to a year, occasionally, they continue for longer, stretching to up to 4 years.

Handling Over The Reins??? – Not Exactly

The value of hiring a CFO, C-level financial executive even only it is a part-time or temporary basis is in for tapping his/her experience for a big picture issues and financial challengesHowever, that may raise a bit of quandary for some – how much authority you can hand over to your part time CFO?

As in this case, the CEO or the president of the company calls the shots, so there isn’t much difference when the CFO is outsourced.

Is It For Everyone?

Outsourcing CFO services is a upcoming trend especially in the Indian markets.  The recession may have encouraged more experienced accounting professionals to start their services independently. Meanwhile, financial questions and challenges for small and midsize businesses themselves only got more pressing even as revenues declined.

Similar to Visiting CFO, iXCFO and Elevate;  Alamak Capital, and Amplus Consulting also offers CFO services to small and medium sized company that not only help you to gain credibility, and backup your company with a strong financial plan that is 30% cheaper than your in-house CFO professional.

Image courtesy:cfosystemslic.com

Connect with Service Provider

Get connected within 24 hours to pre-screened, trustworthy and small business friendly service providers for Services in top Indian cities

Latest Posts

5 Top Mobile App Tips To Help Your Business Get Noticed

February 27, 2017

Mobile Apps are here to stay!!! As more and more consumers are beginning to depend on their mobile devices, the

Read More  
6 Social Media Marketing Strategies To Drastically Improve Efforts In 2017

February 24, 2017

A decade back when social media marketing started making its foray as a preferred mode of communicating with customers, most

Read More  
Top 5 Marketing Trends To Watch Out In The Year 2017 For Startups And Small Businesses of India

February 22, 2017

Marketing like we all know is the life line of any business. It is a form of communicating with consumers

Read More  
CONTENT MARKETING FOR SME’s

February 22, 2017

Content marketing services have become a buzz word and an important marketing strategy to remain competitive in business. However, SME

Read More  
Top 5 Crucial Benefits That CRM Software Offers To The Small Businesses Of India

February 21, 2017

Buying a CRM Software might be a big deal for any small businesses, as for them expenditures are the most

Read More  
How Outsourcing Accounting & Finance Can Work Positive For Your Business?

February 18, 2017

For years, companies have outsourced specific niche accounting functions of their businesses, such as tax preparation, legal assistance, financial portfolio

Read More  

Latest Events

Event
Indian Women Convention 2016

Date: 08 October, 2016

Event
World Brand Congress

Date: 23 November, 2016 - 25 November, 2016

Event
Event
Business Opportunities Show

Date: 27 November, 2016

Event
CeBIT India

Date: 08 December, 2016

Event
Nasscom Product Conclave 2016

Date: 26 October, 2016

Event
Pune Connect 2016

Date: 19 November, 2016

Event
Event
CEO Hangout Sales Summit

Date: 08 December, 2016

Event
Visit Startup India

Date: 17 October, 2016

Join and be part of our 100000+ Business Owners and Decision Makers Network