The Chief Financial Officer (CFO) of a company performs a wide variety of functions for the company. It would be very easy to dismiss the CFO as just a glorified bookkeeper but that perception greatly minimizes the value of a CFO to any company. Persons holding CFO positions with major companies garner six-digit salaries or more. No organization is going to invest this much in a simple bookkeeper. CFOs typically hold master’s degrees in accounting or related business fields. Some hold degrees in business administration but with an emphasis on finance and accounting. Financial officers typically have several years experience in the financial field before coming to the position.
Large companies have the resources (and the need) to have a full time CFO in charge of financial management for the company. These executives often have a staff of well trained professionals to assist in the duties of the position. CFOs normally report to a Chief Operating Officer (CEO) and/or to a board of directors. In the hierarchy of business executives the office of CEO is only just below the CEO in power and importance. The range of duties for these financial executives are determined by the CEO, board of directors and, in some jurisdictions, government regulations. All CFOs will have four basic responsibilities with additional duties added as required by the organization.
The first primary function is a high level form of “bookkeeping”. The person in the position manages and directs the staff of accountants and bookkeepers in keeping the company’s financial records accurate and up to date. While this is one of the simpler functions to understand the importance of accurate financial records has significant bearing on the organization’s overall profitability and business health. (more on this later)
Another primary function of the CFO is to share information. All business decisions made by top level management must include analysis of the financial impacts and requirements connected to the decisions. The CFO provides this information to the decision-makers. To meet this requirement, CFOs typically use a combination of technology, staff input, experience and professional intuition to produce forecasts concerning the financial results of management decisions. Sound business decisions are based on accurate and up to date forecasts provided by the CFO office.
The third top level function of the CFO office is compliance. Compliance includes tax calculations and payments, government required financial reports, public financial statements and reports to shareholders. Each company has specific compliance responsibilities according to the business sector, business type and jurisdiction and other specialized requirements. For large organizations, compliance issues can be very complex and require a major part of the CFO’s effort and time.
The fourth major function of the chief financial officer is assistance. At all management levels, decisions are made based on the information available to the manager. The CFO is the source for the financial information used in the decisions at all levels. It is the duty of the office to provide the financial information needed or requested by internal customers so informed decisions are made. Sometimes lower managers should not have access to the more sensitive information and the CFO manages these access decisions.
The CFO and the small company
Small organizations (and especially start-ups) need good financial management, too. These companies rarely have the resources to hire a fully qualified financial officer even though the need for proper financial management exists. Often the primary owner takes on the CFO duties as well as the CEO duties and many other functions. Quite often the owner/CEO reaches a point where the financial management takes away too much time from the basic business duties. Growing a business requires constant effort to find new customers, maintain existing customers and relations, hire staff and much more. A recent practice in the business world is to use part time cfo services.
Many financial services organizations have embraced the outsourcing CFO idea and now provide such services to their clients. To the client company the benefits of virtual CFO services are substantial. Freeing the top management from financial functions is only one benefit. A qualified financial contractor or a team of experienced financial professionals can make sure the company meets all statutory requirements for record-keeping and reporting.
This is especially important for start-ups where the primary focus is growing the business. Sometimes financial regulations are overlooked in the flurry of start-up activity. Overlooking some financial regulations can cause a new business to fail prematurely when a governmental authority institutes actions.
CFO Outsourcing in Dubai, Sharjah, Abu Dhabi & other Emirates of UAE
The recognition of Dubai as an ideal place to start a company has fueled an increasing number of new businesses in the city and surrounding areas. Recognizing this trend, several Dubai-based financial services companies are now offering CFO services in Dubai. If you are considering business formation in Dubai outsourcing CFO services is one option worth investigating.
A virtual CFO is much more than an accounting service or a glorified bookkeeper. A CFO service can deliver all the functions of an in-house CFO at a fraction of the cost of a qualified CFO professional. A business can contract CFO services in Dubai as needed. For new businesses CFO services can assure the business’s financial record keeping meets all statutory requirements for doing business in the UAE. This function alone is worth the price of a virtual CFO to be part of the business start up planning and implementation. Basic accounting can be managed by any qualified accountant. Advanced financial planning is best handled by experienced outsourced CFO services.
CFO outsourcing services in Dubai are available as long-term contracts (several months or longer); short-term contracts (days or weeks) and even on a per-hour basis. The price range is a small fraction of the cost of hiring and keeping a fully qualified CFO professional. In most cases the virtual CFO will be a qualified professional supported by a staff of assistants working for the same outsourcing company.
Functions of Outsourced CFOs
When you outsource your CFO you can expect to have these functions available:
• The outsourced CFO can administer the financial functions of the company. This includes establishing proper accounting practices; setting up metrics to monitor company performance; financial strategy development, and setting up control systems.
• Virtual CFOs can be a valuable component in the planning team. An insight into the financial implications of proposed actions adds to successful planning.
• A virtual CFO can implement strategies for managing taxes and regulatory compliance.
• Outsourcing CFOs will give your company access to a team of risk management professionals with proposals intended to mitigate your risk profile. These professionals can monitor legal issues to keep company compliance up to date.
• Basic accounting functions can be monitored by your virtual CFO. The CFO team can monitor and forecast cash balances and even arrange for equity and debt financing.
• With experience and established relationships with local banking institutions an outsourced CFO can represent the company’s interests with banks and investors.
• An outsourced CFO can manage statutory requirements such as annual audits and financial reports to assure compliance.
Push Digits provides distinctive part time CFO services in Dubai, Sharjah, Abu Dhabi and other Emirates of the UAE to a wide range of local and multi-national clients. We provide qualified Chartered Accountants with wide range of industry oriented experience to serve our valuable clients. Feel free to request for a no obligation consultation meeting with one of our Managing Partners to discuss CFO services in much more detail.