How an external financial manager can save you money
The outsourcing of accounting, outsourcing of payroll, labour, marketing, legal services, production and many other activities is already standard for most companies. The usage of external professionals is more effective in today’s situation, due to the business significant increase, merges and acquisitions. The time when sufficient managerial knowledge for the owners of small and medium-sized businesses was the knowledge of the bank account balance and the amount of unpaid invoices, is gone for good. However, qualified experts that can guide you in your complex decision-making are missing on the market.
Analysis of our clients’ results proves that companies in the same industry - production, service or sales, who have an internal or external Finance Manager (Officer, Director) achieved in the last 3 years “double-digits” higher profit after tax than the companies where such position is missing. Our analysis confirmed that our clients after they started using an external Finance Manager, improved not only profits, but increased equally the sales and the operational efficiency.
The role of the qualified and experienced Finance Manager is not to “cut-the-costs” as many consulting companies present as their primary solution. The role of a qualified Finance Manager is to review the internal processes inside the company, to standardize and optimize them in order to facilitate growth, and optimize, not cut, costs using various methods (Operational Excellence, Lean, Six Sigma, ABC costings, DuPont…). A qualified Finance Manager helps to discover weak points inside the company and eliminate them using relevant KPI`s and Score Cards to drive growth through an agile organization. The outside view on the current management of the company and its financial health will bring new impulses and often leads to the implementation of improvements and innovations that drive the company forward. The innovations and improvement of financial health (working capital, bank financing) are just among the main expectations of business owners. And last but not least, a qualified and experienced Finance Manager is able to act when an unexpected situation occurs.
Many companies have internal qualified managers who fulfil the above mentioned requirements and who are able to complete the tasks beyond shareholders expectations. Congratulate gents, you may skip further reading of this article. For other companies’ owners the question is not “If to outsource an external Finance Manager” but when and where to find him/her. The solution might lay in using an external Finance Manager or CFO on Demand.
The advantages of CFO-ON-DEMAND for owners significantly exceed the potential risks (which exists with an internal CFO). The following arguments might eliminate myths spread on the market and help owners to start with an external Finance Director service:
The KEY advantage being that an external Finance Manager has wider experience form different companies and industries than a “long-lasting” internal Manager.
An external Finance Manager is not surprised by a crisis situation and brings the solutions, compared to an internal Finance Manager who might be shocked after many profitable years.
An external Finance Manager can implement the modern and effective processes upon proven concept in all companies.
He/she invests his/her reputation to meet the client’s expectations and guarantee the damages in full, compared to internal Finance Manager who is responsible for losses and damages up to 4-months salaries.
An external Finance Manager focuses on the internal processes and results instead of playing internal “political games” inside the company and is available on demand immediately when you need him/her without holiday.
Your possibility to release him/her immediately whenever you consider he/she should be released is another huge advantage compared to an internal employee, you can use the external Finance Manager only for the time necessary or for a specific project, thus bringing extra cost-savings.
Payment to an external Finance Manager is for work done, not for the time spend in the office and the fact that there are no additional costs (desk, chair, computer, health and social insurance, new vouchers for holiday and many other benefits, costs for recruiting or head-hunting) makes him effective but not valueless.
The External Finance Director is therefor the solution for the lack of highly qualified finance people on the market and at the same time making sure your company has all the tools and skills it need to grow and prosper.