Outsourced CFOs – A Trend On The Rise

A CFO is crucial to the financial functioning of a big company. However, the advent of companies that provide CFO calibre personnel on a temporary basis has led to a reduction in costs and optimum output

Large corporations cannot imagine functioning without a CFO. Smaller ones cannot afford one. The mid-sized ones scrape through with a free-will fuelled ‘hire-and-fire’ module which works both ways. So what if you were told that you could actually get a CFO for a temporary period to, get your accounting processes in place, oversee company law, create and implement a financial strategy, interact with potential investors and VCs to raise funding and actually lay the foundation for a scalable financial division?

Back in April 2013, Deepak Narayanan received a call requesting his immediate attention and action. It was a call from Amit Dalmia – an operating partner of the marquee private equity firm Blackstone. Gokaldas, a part of Blackstone’s portfolio, experienced attrition of key people in their finance division (including the financial controller), as a precedent to the finalisation of their quarterly numbers.

Narayanan and his team from MyCFO – a company that provides CFOs on a temporary or case-to-case basis – assisted Dalmia and Gokaldas with their audit closure and streamlined its MIS process, reporting structure, data entry process and inventory management. MyCFO was started in 2008 by Narayanan a trained CA and his cousin S Venkat, a finance specialist and CFO in the past.

Apart from this, MyCFO also assisted SH Kelkar, a fragrance manufacturing company, in which Blackstone has invested. SH Kelkar engaged MyCFO prior to a fundraising initiative that helped them generate Rs 243 crore in 2012. The engagement wasn’t one dimensional by any means. While MyCFO’s involvement initially was akin to a fulltime CFO, after a couple of years, they were involved in the implementation of Oracle ERP, assisting SH Kelkar’s actual CFO in budget building and MIS. MyCFO also helped preparing data for an audit and due diligence by KPMG.

How Does Outsourcing A CFO’s Portfolio Help?
Outsourced CFOs bring a great decree of professionalism and methodologies that is free from baggage, incumbent processes and detail oriented mindset. While the demand is still less, companies are opening up to this concept and accepting an outsourced CFO as a way to cut costs and achieve optimum from the bandwidth available.

Other Players
Apart from the Mumbai based MyCFO, there are a few more companies that provide outsourced CFO services. These include CFO4U (Mumbai), Amplus Consulting and Alamak Capital (both Delhi) and Inspace Consulting (Chennai).

Source: The Economic Times

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