http://mycfo.in

Dilbert Blues Almost Over

as Companies Warm Up

Big to Outsourced

Functions

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Mr. S.Venkat talks about the Outsourcing CFO functions

and the CFO industry in this article by Times Of India

Worried that your assistant picks up the bag the

minute the clock strikes five pm and you can do nothing

about it? Or that your finance department is under

enormous stress when D days like September 30 (income

tax filing for corporates) or March 31 are round the corner?

Worse still, your Diwali shopping festival logos are still

incomplete?

There appears a solution to all of the above in the

form of organizational outsourced services providers.

From virtual secretaries who will do any errand for you to

outsourced marketing head and CFO (chief financial

services) providers, the traditional organisational structure

chart is in for a make over. Today , such on call executives

are game for anything, be it complex stuff like hand

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holding you till your IPO (initial public offering) exercise is

complete to even the mundane data entry operations. Of

course, all for a fee.

Interestingly , the cost differential and the booming

entrepreneurial culture are not the only factors driving the

demand for such specialist service providers. As per a

study done by MyCFO, there are 65,000 promoter driven

medium enterprises in India with a turnover of Rs 100

crore of which only 10% are listed. “Finance is no longer

seen as a holy cow in such organizations with the role not

solely restricted to the promoter alone. Owners who are

committed to change processes see the CFO as a partner

to deliver that change,” S Venkataraman, director, MyCFO

said.

“For most of these companies, cost advantage is

secondary as they come to us more because of

predictability and scalability,” Harith added. In the case of

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MyCFO, the company normally looks at three to five year

contract with the firm, with an onsite CFO who starts with

the basics in some cases, like setting up the accounting

processes, establishing a credit line with the bank to

eventually helping the company with its public listing.

The model of MyCFO is essentially a matrix structure

where the onsite executive is supported by offsite

specialists like for example domain experts in transfer

pricing or taxation. “We look for longer engagements as

valuations cannot be achieved over night,” S.

Venkataraman said. MyCFO is currently working with 80

companies at the moment which are a mix of venture

capital funded companies, start-ups by technocrats and

multi-generational family businesses where the Gen Next

is clamouring for change. The salary of the onsite CFO

ranges from Rs one lakh to Rs 12 lakh per month. “But the

variable component is pretty high out here as we want to

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be in the game along with the promoter,” Venkataraman

said. Though he refused to divulge revenue figures of the

company, he said MyCFO was currently operating at a

30% margin.

Read the full article here: http://mycfo.in/blog/?p=374

Source Link: http://mycfo.in/blog/?p=419

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