Can businesses afford not engaging a CFO? Interview with Rupen Kotecha

PhotoCredit: West Australian

Photo Credit: West Australian

Whilst large organisations traditionally enjoyed the luxury of engaging a Chief Financial Officer (CFO), the services of a part time CFO are getting more and more essential within the small & medium sized organizations. 

Zeeshan Pasha, CEO of Nifnex spoke to Rupen Kotecha, the MD and Regional Director-WA at CFO Centre, who over his career to-date, has acquired invaluable knowledge and experience of the problems and opportunities facing large and small businesses in sales, operational and financial areas.

 

ZP: What are the underlying issues with one person wearing the CEO, CFO, CMO hat?

 

Rupen Kotecha: The problem with one person wearing too many hats is they work “in the business” rather than “on the business”.

A common complaint that we come across from CEOs are “ I knew we had a ‘good business’ but we knew we were barely scraping the surface in terms of potential…” or “My expertise is in growing businesses and the irony was that I was spending 90% of my time simply making sure that the business was functioning”.

MDs may have the ideas, the creativity and the desire to build a great business but without the underlying systems and strategies the business can control the people rather than the other way round.

An MDs’ role should be investing for growth and with the right CFO beside them to allow them the space to run the business, this is possible.

 

 ZP: How would engaging an accountant differ from engaging a CFO?

Rupen Kotecha:  A lot of people ask the question….if I already have an external  accountant why do I need a CFO?

Traditional roles define that an accountant runs the numbers and provides a historical view of the company’s activities whilst a CFO will take the history apply logic, interpret and deliver scenarios, creating future financial strategy.

Often it means teasing out better systems (enhancing processes), managing front end (client) engagements more effectively, saying ‘no’ to clients/business that is not profitable (defining what is profitable).

In simple terms, a CFO will provide a commercial approach involved in developing and implementing strategy based focused on the growth of the business and making money.  This requires the compliance process undertaken by accountants and a collaboration between an accounting firm and a CFO, working in conjunction, can only serve to benefit clients.

 

 ZP: Typically, businesses would think engaging a CFO is expensive. Do you hear that often? Would love to hear your thoughts.

Rupen Kotecha:  The CFO Centre provides the highest calibre CFOs at a fraction of the cost of a full-time CFO.

For the cost of a junior admin person, an SME can have access to one of our highly skilled and experienced CFO’s. Furthermore we don’t tie our clients into long term contracts. It is up to us to deliver value  and to keep ourselves retained by the client.

Engaging a CFO Centre CFO provides a real opportunity for a company to save between $80K-$100K per annum not having to recruit someone full time, without compromising on commercial experience.

 

ZP: What are the 5 most common issues & challenges you see businesses are facing today, given your abundant knowledge and international experience in the field?

 Rupen Kotecha:

  1. Cash-flow problems which are not managed effectively.
  2. Lack of quality financial information so as to understand where the business is at and use the information for informed decision making.
  3. Weak accounting systems and/or team.
  4. No forecasting or budgetary processes nor clear reporting.
  5. No Strategy or Succession Plan

 I will go back to your first question though and reiterate the most common and overriding problem is No Time – because busy business owners are wearing too many hats

ZP: Can you please briefly share with us a success story you have had recently.

 Rupen Kotecha: A professional services company with an annual turnover of $2m was facing uncertainty with no clear focus.  Cash flow shortage, limited growth along with no budget forecasting or cash flow projections left the company at a standstill.

A full investigation was undertaken to get a clear view which lead to creation of reliable budget, cash flow forecast, new accounting system, CRM system implementation, establish sales targets with monthly measurement sales target vs actual.

The company is now in control and secured with a clear sales focus and good insight into current and projected situation at all times.

 

 ZP: Are there any particular industries you have a strong passion for and draws you towards?

Rupen Kotecha:  Our CFO team has experience and skills in all sectors.   A large part of the CFO skillset is transferable across industry sectors.

Our Australian team is currently working with organisations in Agriculture, Manufacturing and Industrial , Mining and Resources and Mining services, Professional services, Not for Profit and Institutional, Property, Retail and Wholesale and Construction and the Services industry.

 

ZP: Every business needs the services of a CFO and now having the ability to engage the services of an internationally qualified and renowned CFO especially on a part time basis without breaking the bank seems awesome.

How do your services work? Can business engage you hourly / one day a month ?

Rupen Kotecha:  Our partnership with a business includes a commitment to provide ‘a high calibre part-time chief financial officer for a fraction of the cost of an in-house CFO’.

Where an in-house chief financial officer appointment limits a business to the personal skills of the individual, we have structured our business so that each of our clients can enjoy the combined skills, contacts and experience of our entire national network.

So rather than having a company’s finance department directed by the ‘power of one’ we offer a solution which allows them to tap into the ‘power of one hundred’.

In terms of pricing, a large number of our clients are on a fixed cost per month with key deliverables agreed upfront. This gives the client comfort as to the investment required and budget.

Our no cost and no obligation ‘discovery session’ at the beginning of our engagement forms the basis of the amount of the fixed monthly fee. In some instances clients engage us for project type one-off activity as well as our permanent part time model.

 

 ZP: Lastly, The services of a part time CFO are getting more and more essential within the small, medium and large organizations. What do you think are the main reasons for this?

Rupen Kotecha:  Today’s business environment is fluid, dynamic and evolving at a far greater pace than even a decade ago. Those businesses that do not operate within this paradigm will become uncompetitive, underperform and eventually fail.

Our business planning process helps business owners to move from a disorganised culture of “fire fighting’ to a more ordered and dependable culture where the whole team has a clear direction and visibility and each of the cogs within the business work together as part of a well oiled machine

 

Thank you for your time Rupen.

Click Here to find Out Why Many Of The Fastest Growing Companies Are Taking On High Calibre Part-time Chief Financial Officer For A Fraction Of The Cost Of A Full-time CFO…

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