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 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 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 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.
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