What You Can Expect from an Outsourced FD/CFO

The idea of hiring even a outsourced FD/CFO may seem to some SMEs a bit over the top.

But for companies whose ambition it is to get into and survive the coveted scale-up phase, hiring an outsourced FD/CFO makes perfect sense. They know that they’re getting a finance veteran, someone with big business experience, who can provide the guidance they need to grow rapidly and help them to avoid the costly mistakes that so many ambitious SMEs make as they attempt to move into the Big League.

As Colin Mills, Founder and Chairman of The CFO Centre Group, said in his book about scale-ups, “The reality is that there is great value in having someone from the next level if you’re aspiring to get there.” [1]

Businesses who hire outsourced FD/CFOs understand that today’s FD/CFOs are capable of delivering far more than bookkeeping or accounting services. They provide advice and analysis and implement practices and processes. They can work with your board of directors and external stakeholders such as your bank or investors. They can also advise you on mergers and acquisitions. Besides strategic analysis, they can provide advisory support on everything finance-related in your business.

Their responsibilities might cover business planning, capital structure, risk management, auditing and reporting, tax planning, capital expenditure, investor communication, R&D investment, working capital management and company budgeting.

Businesses that don’t hire FD/CFOs are often unaware of the opportunities and profits they’re missing out on. When asked why so many SMEs don’t hire FD/CFOs, Matthew Bud, Chairman of the international Financial Executives Networking Group, said business owners are either unaware of their need for an FD or reluctant to spend the money.[2]

“What many entrepreneurs don’t realise is that they’re already spending that money in lost profits and misspending,” he told Inc.

“They’re not seeing the dynamics of the business from an educated financial point of view. You can’t always go with your gut in making financial decisions, which is what a lot of entrepreneurs try to do.”

So, what can you expect from a part-time FD/CFO?

Well, the role an outsourced FD/CFO will play in your business will depend on factors such as the size of your business, your expectations, your industry, and your corporate strategy and business goals. But a good FD/CFO will work on your business’s finance strategy and finance operations and manage areas such as compliance, tax planning and legal, outsourcing and banking relationships.

To achieve success in these different roles, an FD/CFO will need outstanding hard and soft skills.

If you’re a CEO or business owner, the FD/CFO will be your strategic partner, providing financial insight and strategy and helping you to improve profitability and cash flow.

A good FD/CFO won’t, however, be a ‘Yes’ person, someone who rubber-stamps every initiative without due diligence.

Charles Holley, CFO-in-residence at Deloitte and former Walmart CFO, says good FDs are independent-minded yet supportive of their CEO.[3]

“My CEOs counted on me to be the truth-teller, to form my own opinions on important company decisions, and to speak up. At the same time, they expected my support for execution.”

Great FDs challenge the business, he says. They point out problems and propose possible solutions to “spark the debate”.

“FDs are in the best position to call attention when the numbers aren’t supporting the strategy. For example, FDs can push the business to change capex priorities when the underlying ROI assumptions are no longer supported by the numbers.”

Besides being a trusted advisor and sounding board, a good FD/CFO will help to raise efficiencies, identify opportunities, manage risk management, and manage capital structure.

Since they speak the language of financiers and understand what they are really interested in, FD/CFOs can also liaise with financial institutions, investors, and auditors on your behalf.

In other words, an outsourced FD/CFO can help you manage the transition into the scale-up phase more smoothly and ensure you reach your growth targets sooner.

How it works in practice

The CFO Centre’s outsourced FD/CFOs use a proven framework known as the ’12 Boxes’ to identify where the problems are within any business. They use it to review every aspect of your company’s finance function and identify every problem area.

They will help you to understand your company’s finances; eliminate cash flow problems; identify cost-savings, and improve profits.

They can also help you and your team to understand your main profit drivers; find and arrange funding; identify your Critical Success Factors and Key Performance Indicators (KPIs), help you to expand nationally and internationally; and build value to make your business more attractive to investors or buyers.

To answer any questions you may have or to chat with us, reach out to us here.

Alternatively, if you’d like to identify the strengths and gaps in your business make use of our Scale and Exit Business Analysis tool

[1]‘Scale Up: How to Take Your Business to the Next Level Without Losing Control and Running Out of Cash’, Mills, Colin, Brightflame Books,

[2] ‘Here’s When, Why and How to Hire a CFO (And Yes, You Can Afford It)’, Tabaka, Marla, Inc., www.inc.com

[3] ‘What CEOs want—and need—from their CFOs’, Holley, Charles, Deloitte, www2.deloitte.com