It is without a doubt that the role of a Chief Financial Officer is significant for any kind of business organization. But actually, there are times when hiring one becomes a question...just like when you’re simply concerned about the costs involved.
Common scenario is, big and capable companies opt for direct hires, while the startups and SMEs prefer outsourcing. While it’s true that different companies and business owners have their own beliefs, values, and practices when it comes to staffing, we simply can’t forgo the fact that there’s a way to know which hiring process is suitable for your business.
That being said, with our years of experience in providing business advisory and financial management, staffing, as well as accounting services in Singapore, your friends here at Enterprise Global are here to help you determine which is the best way for you to hire the most qualified Virtual CFO for your company.
To know which one suites you best, take a look at some of the differences between the two:
There are two ways you can go about this: (1) The conventional in-house hiring, which is to hire a Chief Financial Officer as a permanent employee of your company; and (2) Direct or 1-on-1 contract with freelancer/professional who can provide you Virtual CFO services.
For the first one, here are some of the most important considerations you would have to think about:
- You need to be able to offer a basic salary and employee benefits package that is but rightful to the CFO’s capabilities, experiences, etc.
- There is more personal engagement with the CFO as you would have face-to-face, in-person conversations, plus 5 times a week physical presence in the office; hence progress monitoring is technically easier.
- Finding professionals can be easier since there are still lots of people today looking for stable careers.
- Onboarding, company training, and adjustment periods cost time and money for the company. In addition, if your employee leaves the company, you’ll have to go through the whole process (and expenses) again.
- Outside investors tend to show more interest in companies that are well-staffed and have complete finance teams.
- You can let them sign a non-compete contract which prevents employees from taking ideas (obtained while working for you) and use them for another once they leave your organization.
There’s a thin line between direct hiring a VCFO (and outsourcing), but there are things you still have to think about, just like these:
- Finding these individuals may be a lot harder than it seems, as most of them are part of virtual CFO teams.
- Cost of hiring a freelance VCFO may be lighter on your pockets since you’re dealing with only one person. Because 100% of your payment will go directly to him/her, price for the services is cheaper and there’s more room for negotiation.
- You can take advantage of his/her personal and professional network and experiences.
- Once an unfortunate event occurs and your VCFO would have to leave the job (even without completing the project), it will be more difficult and stressful to handle.
- Flexibility and availability are also to be expected as you’re dealing with a freelancer.
- The freelancer may finish a task based on prior commitments using a first come, first served system.
When we say that you’re about to outsource a company that provides virtual CFO services, generally, it means that you’re about to work with a company, organization, or a team that offers such service (it may or may not come with other product/service offerings).
By outsourcing virtual CFO services, you should be able to think about and expect these things:
- Save yourself from committing to pay a large amount of basic salary, medical/dental benefits, insurance, and other in-house employee compensation package inclusions.
- Person/s handling your company’s financial needs are more focused on the stipulations of the agreed project. Their time and attention are only directed to their contract’s goals.
- Take advantage of a whole team’s knowledge, experiences, contacts, personal and professional networks, multi-industry capabilities, and more.
- Albeit modern technology, communication gap is still likely to happen.
- Cost is more expensive than that of direct hiring a VCFO. The price you’re paying is for their company, not just for the VCFO that handles your business.
- Higher-paying clients/companies will most likely be prioritized by the VFCO company; OR, the newbies or newly joined CFO in their team handles the small company or less-paying client.
- By working with a team of VCFOs, you can easily get help from bigger and more complicated projects.
- They provide better internal controls; hence, lesser risks.
- Once the VCFO in charge of your company suddenly needs to leave the project, it will never be a problem for you since anyone from their team can easily step in. There’s consistency in work and progress so there’s a possibility you won’t notice if ever such a change will happen.
So there you go. Here are just some of the differences of direct hiring and outsourcing a VCFO. Remember, to know exactly which of these are most suitable and beneficial for your company, you’d have to determine each one’s cost, flexibility, productivity, and expertise implications on your current needs and business goals.
Should your analysis leads you to believing that outsourcing virtual CFO services is the best for you, then search no more. Work with the experts here at Enterprise Global. Speak with our team now!