The pros and cons between hiring an internal or an outsourced CFO

Companies often have to decide between hiring an outsourced CFO or recruiting for an internal full-time position.In this paper, we look at the crucial importance of the role of CFO within corporates, and how to choose when to turn to an outsourced CFO or hire a dedicated, internal finance head. In particular, we hope this paper proves useful for startups who do not yet have a CFO of any kind, for companies who are thinking about outsourcing or hiring internally, and to newly appointed CFOs, whether experienced or promoted from within.The position of chief financial officer, more commonly known as the CFO (financial director/FD in the UK), is an indispensable role in modern corporate business. The role has evolved so much in such a short period of time, particularly in the aftermath of the 2008 financial crisis and subsequent global reparation efforts, of which many countries are still dealing with and will be for some time.Though the nuts and bolts of a CFO’s role are to provide financial results and shareholder returns, finance chiefs are now expected to lead growth initiatives for their companies. The decision of hiring an outsourced CFO or recruiting a full-time finance chief for an in-house role is therefore crucial to companies making this decision.As the CFO is in a unique position within a company, in control of the company’s finances, involved with executive level strategy decisions and in contact with all company departments, he/she is primed to offer informed guidance and drive growth in a manner that no other individual within a company can provide, including the CEO.

Growing companies invariably reach the point when they decide that they need a CFO. They may have an in-house accountant and book-keeper, as well as other finance department employees, but now what is required is a qualified chief financial officer. Many employees who work in finance, such as book-keepers or accountants, are often looked to and appointed as CFO, when in reality, they are not suitable for the role.

To become CFO the right training and experience is fundamental. Many successful and capable CFOs may well have once been book-keepers or accountants, but, for such an important role, the level of experience in the myriad of areas in which the CFO plays a decisive role is a strong indicator of what the candidate may bring to your company, whether outsourced or internal.

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