I will start this article with the famous Quote of Peter Drucker ‘Do what you do the best, outsource the rest’.
Many big companies are following this quote but backbone of our country i.e MSME and small industries are still far away in applying this concept. They are still involved in doing the work at there level and try to avoid outsourcing/ freelancing of there work, but outsourcing is the need of hour in this competitive environment to minimise the fixed cost of the organisation and also get the best result from the best of there filed at lower cost in comparison to inhouse employee.
After lockdown, now the MSME enterprises are also looking towards this concept of outsourcing, so that cost can me minimise. In the era of digitalisation, now a new concept is running in the market, Virtual CFO. CFO means Chief Financial Officer, earlier if a company crosses a turnover of 100 Crore then they feel the requirement of CFO who can manage there business not just from Financial and compliance Point of view but also suggest strategies on how to grow business and manage the organisational team.
Cost of hiring a CFO is vary high, so it is not possible for every organisation to hire. But with the help of Virtual CFO, you can get the almost same result at economical cost, because in case of Virtual CFO, he is not the employee of company. He is a professional having a deep knowledge of finance, accounts, taxation, ROC Compliances, business understanding and having the quality of future forecasting on the basis of industry trend and company past trends. He must be able to form the strategies for company growth after taking care of available resources with the organisation.
In case of virtual CFO, he takes care of many organisation at the same time, so his hiring cost is low in comparison to full time CFO and his rich experience with different organisation and different industry can be used by organisation to manage their business. Virtual CFO can be hired in 3 ways: –
1. Onsite CFO – In this case, CFO and its team visit the premises of client on regular basis and perform their work on site of client, as per the decided term of engagement and submit there reports with the management. Here the appointed CFO play the role of right hand of entrepreneur to help them in growth of there business apart from regular compliance of accounts, finance and taxation related queries.
Here, the business owner gets the benefit, that an expert is available in his office with whom he can discuss the growth strategies and he has adequate knowledge of how to implement owner growth idea into reality after analysing the pros and consequences from different angles.
2. Offsite CFO – In this type of engagement, appointed CFO and his team works from there own office and helps the business owner to achieve their goal with minimum cost. As the concept of Co-working space is growing, offsite CFO help the owners, who are working from co-working space to engage them as their growth partner with low investment at starting stage of there business because they have not to provide any computers, sitting spaces to the offsite CFO, as they are managing the same from their own offices and results are almost same as delivered by Onsite CFO.
3. Hybrid CFO – This concept is mixture of Onsite CFO and Offsite CFO, where mostly services are delivered through online mode, however, the CFO and his team visit the client premises as and when required to achieve the enterprises goal.
Benefits of Appointing Virtual CFO
√ Avail services at Low Cost in comparison to in house appointed CFO
√ Utilize rich experience of expert of there field
√ Dedicated team to get follow-up from client to help them in achieving their goal
√ Even start-up running from co-working space are also able to hire experience person who can be the mentor to get help and guidance to convert their idea into reality
√ Low Compliance Cost
Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.
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