Today we find a growing tendency, particularly among SME's and Mid-Corporates to hire an experienced CFO services firm, instead of hiring their own CFO to take care of the day to day operations and Mandatory/Regulatory responsibilities of a CFO.

This approach can be partly attributed to the growing expectations from the CFO role, with the change in statute and business priorities and emerging needs of business entrepreneurs going forward.

The Companies Act, 2013 has enhanced the responsibilities of the CFO manifold from the traditional book keeping responsibility to that one who is responsible and accountable for a variety of functions. The skill sets needed is quite diverse now and this sudden change in statute has created a vacuum in the market. There is a shortage of CFO's with all round skills in the market and if available are pretty expensive to hire. This is driving many company managements to outsource the function to a CFO firm.

The need for continuity, which is a key to the finance, accounting and compliance function, is yet another reason forcing company management to hire a CFO services firm. Employee turnover is quite high in CFO jobs and so the company managements feel it is better to go for a consultancy firm to ensure continuity.

The recent trend of large investments flowing into SME's/Mid Corporates from the Private equity/ Venture capital/ Angel investor space has enhanced reporting requirements/ strong MIS etc. and these investors prefer an outside firm delivering their requirements vis a vis the in-house team.

We believe, the current trend of outsourcing CFO functions in part or full, is bound to grow in the coming years as the businesses become more complex, company management becomes more demanding, shortages of competent CFO's continue, regulatory environment gathers momentum and cost of hiring CFO's become more prohibitive.