Australian businesses can often reach a crossroads when it comes to managing their short-term and long-term financial objectives.
Many small to medium enterprises (SMEs) will encounter difficulties as competition expands and demands are placed on the company to perform to a high standard.
This is why the role of Chief Financial Officer (CFO) is imperative, selecting a candidate who can reach agreements and manage the balance sheet for the viability of the organisation.
Rather than educating an internal candidate as they graduate up the accounting ranks, some operators decide it is best to outsource the CFO position.
We will take a closer examination of this model, deciphering how a company can make gains for their short-term and long-term health.
Client Dictating The Agreement Terms
For those enterprises that understand the benefits of opting to outsource the CFO position, they will be the ones taking proactive control of their financial future. These agreements can be formulated on a short-term 3-month trial basis that examines key performance indicators (KPIs) or for an end of financial year project. Then there are rolling contracts that can be reviewed and renewed on an annual basis. Others will wish to lock in expert candidates knowing that their track record already speaks volumes, putting pen to paper on a 3 or 5-year agreement. Whatever the nature of the official terms, the client contains full control of the relationship without fearing for severance under a full-time contract.
Obtaining Objective, Independent Performance Analysis
An internal CFO can make a number of gains for their employer, but they will still be susceptible to the same office politics and opinions on workplace figures given the continual interactions. To enjoy objective and independent analysis on a short and long-term basis, it is wise to outsource the CFO position and remove those barriers in the first place. By taking a step back and reading the financial terrain, including lease agreements and terms set with vendors, these specialists will be able to read the progress of the brand devoid of any predispositions or preconceptions about the business.
Enjoying Immediate Expertise Upgrade
One of the short-term gains that can be enjoyed when the company opts to outsource the CFO position is seeing an immediate expertise upgrade. Those businesses that have a small collect group of people and limited finances might not feel compelled to outsource the role, but these professionals already have the grounding and confidence to enter a foreign workplace and still shine under pressure. That is an asset that can be undervalued in certain circumstances.
Finger On The Financial Pulse
Accounting standards do fluctuate from time to time and this is why the choice to outsource the CFO position is beneficial. Having these virtual operators on hand will ensure that no details are overlooked, a risk that is increased with an internal candidate who might not be across these changing measures. To keep the finger on the financial pulse and to be up to date with industry alterations and policy updates, an outsourced candidate would be better place. Oversight in this instance can lead to litigation, an expensive error that should be avoided at all costs.
Established Industry Connections
It helps to have an experienced professional on hand who can liaise with the appropriate bodies when the time is right. From vendors and bankers to lawyers and insurance agencies, the decision to outsource the CFO position will bypass many of the relationship drawbacks experienced with an internal candidate. They will come prepared with their relationships already established and in tact, switching between other parties to negotiate the best possible deals and leverage their connections for the benefit of their client.