An Outsourced Finance Director (FD) can be hugely beneficial for the right companies. By partnering with a finance specialist, businesses can bring outstanding expertise in on a part-time or project basis, without the commitment and cost of a long-term hire.

For the right business, an Outsourced FD can be transformative. However, it may not be appropriate for every business.

In this blog, we will outline the key pros and cons of an Outsourced FD service.

The pros of an Outsourced FD

The following are some key benefits of working with an Outsourced FD; this is not an exhaustive list, and we recommend reaching out to our team to discuss the full scope of support that our Client FDs can provide.

Cost-effective financial guidance

An Outsourced FD will charge a consultancy fee; however, this will often cost less overall than hiring a full-time Finance Director, particularly when considering salary, bonuses, and potential recruitment fees.

A wider range of expertise

An in-house Finance Director will develop extensive knowledge of your own business and its industry, but an Outsourced FD will often have much broader experience across different industries, and a variety of company sizes and structures. They may, therefore, be able to identify trends or incorporate opportunities that an in-house FD may not know about.

It is flexible and scalable

As provider of a service, an Outsourced FD can be much more flexible than a full-time hire. You may not be able to bring such skills in-house on a part-time basis. An Outsourced FD can work as much or as little as you need, such as one day a week/month, or for a limited project (such as a corporate transaction).

Objectivity

Due to being an external person, an Outsourced FD can offer a more objective, detached, and fresh perspective on important issues. This includes challenging existing norms and practices which are inefficient or problematic, despite being favoured by directors.

The potential drawbacks of an Outsourced FD

While an Outsourced FD presents clear and valuable benefits to the right businesses, the reality is all businesses are different, and not all will be suitable for this kind of partnership.

When deciding if an Outsourced Finance Director is right for your business, the following should be considered.

Limited integration

While an Outsourced Finance Director can be well well integrated with your business and its internal processes, there may be limits to this due to them not being a full-time employee dedicated to just one organisation. If you need an FD to be fully immersed in your company, and only your company, hiring an FD in-house in may be preferable.

Scheduling and availability

A good Outsourced Finance Director will make themselves widely available to help your business with its needs; however, there is naturally a limit to this availability. This is especially the case if you work with one on a limited/part-time basis. If you need round-the-clock availability, an outsourced arrangement may not work for you.

Industry expertise may be limited

Depending on your industry, the outsourced finance directors available to you may not have specific and direct industry expertise. If your business operates in a particular niche where experience is rarer, you may get more value out of an in-house finance leader who works for you full time.

So, is outsourcing right for you?

At Gravitate, we believe that an Outsourced Finance Director can transform a business for the better, providing essential clarity, knowledge, and direction for a growing business. Despite this, we know it will not be the ideal arrangement for everyone. That is why we encourage you to assess all options available and potentially seek advice you can trust on which route is most suitable.