Outsourced CFO Consultant: In this article, I would like to briefly explain what a CFO does, as well as what they shouldn’t be doing. We will also look at the advantages and benefits that a CFO consultant brings over hiring a permanent CFO.

The Chief Financial Officer (CFO) position entails more than just ‘score keeping’ on how a company has done. For that function, you would be better off hiring an Accountant. However, I have sadly witnessed numerous instances where Start-ups have hired a permanent CFO (not at market rate) with this initial remit; which under utilizes both talent and company resources that could have been better spent elsewhere.

‘Score keeping’ is where the role starts. The CFO takes financial reporting and fuses it with operational data and metrics which allows them to analyse areas in which the business could make changes to positively affect efficiency, productivity, and profitability.

Outsourced CFO Consultant – Why You Need One?

Financial matters are not the only places where an outsourced CFO consultant is able to lend advice. CFOs are able to help in many critical areas, such as:

  • Advice on choosing cloud software to automate finance, legal, HR and administration workflows.
  • Leading or exploring the opportunity of a potential merger or acquisition
  • Uncovering opportunities and threats to your business presented by other players in the space.
  • The ability to unlock scalable growth through new business models, channels, verticals, or customer segments.
  • Identifying opportunities to improve margins through analysis of channels, service lines and products.
  • Building a finance team from scratch or coaching and mentoring an existing team.

However, the costs associated with hiring a full time CFO role typically puts it out of the reach of many SMEs and start-ups. The average permanent CFO salary in London is £203,800 and can go up to £260,000 (Robert Half 2021 Salary Guide).

The second biggest downside when hiring a permanent CFO is the risk of loss of continuity when the CFO or another senior member of the finance is let go. Whereas hiring an outsourced CFO can mitigate this risk by allowing the consultant to step in when needed to keep a business’s finances running smoothly.

Most start-ups and SMEs do well to find a CFO consultant that can come on-board for short term or medium-term assignments for example, to see through a merger, acquisition, turnaround or to build a finance team. A CFO could also help on a part-time basis to enable continuity, directional leadership or to support transition of staff members.

A CFO consultant has the advantage of starting immediately which saves valuable time and allows the consultant to get to work on a remit straight away. It is also advantageous for companies that are looking to hire a full time CFO where they can hire a part-time consultant to ease their staff into the change. Additionally, bringing in a consultant at the inception can help to flesh out the needs of the permanent CFO role. The result is a better-defined position that is more likely to attract and retain good calibre talent, as well as lead to sustained success for the business.   

In summary, for many SMEs and Start-ups, it makes more sense to hire an ad-hoc or part-time CFO consultant than hire a full-time permanent CFO. Using an outsource firm to ‘lend’ an outsourced CFO consultant is a cost-effective way to carry out important functions like automating workflows, approaching lenders, expanding business operations, and executing time-sensitive financial decisions.

Whether you have a successful business, an under performing one, or are planning for a business transition you may have needs that require a CFO consultant. If you would like to explore the options of hiring a consultant, you can contact us here or call us on 0207 193 8798.