Outsourcing CFO and Financial Supervision - What are they and how could you benefit from them?

Staffing in China: a challenge for foreign companies

The long lockdown that recently ended in Shanghai, and the stringent quarantine policies in China, have challenged most companies and business professionals. The restrictions led many businesses to reconsider their presence in the Country.

Foreign companies, still willing to catch present and future opportunities in one of the largest markets in the world, face the challenge of hiring and retaining their key employees, especially if expatriates.

In these market conditions, companies can benefit from focusing their resources on their core business, while outsourcing administrative and finance functions. In China, Fidinam provides not only the traditional compliance services, such as accounting, tax filing and payroll preparation, but can also dedicate a Senior Manager acting as CFO or Financial Controller on behalf of the client.

Outsourcing CFO services, as well as Financial Supervision services give businesses access to financial experts with a wide range of experiences committed to keeping up with best practices in the field. It also provides business owners with the flexibility to access that expertise as needed, rather than committing to a full-time in-house resource.

For many different companies, there are several scenarios where outsourcing CFO services or hiring an external CPA is the best way to address challenges that business owners face. Circumstances that call for these kinds of services are varied but can include the following scenarios:

• You’re an entrepreneur, your business is taking off and you need to focus on the core activities. You simply don’t have enough time for budgeting, forecasting, and analyzing financial results.
• You run a small- to mid-sized business, you know your customers and your services or products inside and out, but you’re less focused on dissecting the company’s financial side. As a result, you sometimes make decisions based on instinct instead of financial data and other objective inputs.
• You’ve raised some venture capital to expand your business and you need to update your investors about profit margins, customer acquisition costs, and other key performance indicators, but you’re not sure how to put that together.
• Your business has been getting along with a one-person finance department, and that person has decided to leave. While you have a bookkeeper, you don’t fully understand the financial statements they prepare. You’ve felt like you could use more in financial planning and analysis, but you’re not entirely sure what you need.
• You have a bookkeeper or controller, and you do not understand the financial statements they are preparing and presenting.
• The business is not performing as well as you think it should. An objective third party can help you understand where it is falling short and where action is required to turn the business around.

Now what can an outsourced CFO or external CPA really bring to the table? Here below are some of the aspects and tasks that these professionals can help you with:

• Ongoing financial planning and analysis (budgeting, forecasting, assessing long-term and short-term financing needs)
• Analysis of overall financial strengths and weaknesses, with suggestions for improvements
• Analysis of pricing and cost structures to improve margins
• Evaluation of financial data capture and reporting systems, with recommendations for improvements
• Assistance with raising capital, advising on debt/equity mix
• Preparing financial presentations for the Board or investors (e.g., pitch decks)
• Assistance with quarterly financial reporting
• Negotiate with banks on behalf of the company
• Analysis of M&A opportunities, including financial forecasts and post-acquisition operations