Lea Krank
Financial Director
Konsu
Although the recession has changed the situation on the Russian labor market, professionals are not as eager to change jobs as before, and it is still not easy to find experienced financial experts.
The chief financial officer of a company is responsible to the board of directors for all accounting and financial management matters. This comprises two dimensions of financial management: firstly, the everyday tasks, including leading the work of the financial department, routines, bookkeeping, reporting to authorities, owners and investors; and secondly, the strategic financial management, where the focus is on the future: supporting the decision making of the CEO and the Board, evaluating opportunities, planning investments, risk management, and developing the financial understanding of the whole organization. The CFO should think strategically, help create and execute business plans, and show leadership in the financial department.
Outsourcing is already common in the first dimension, accounting and payroll; now it is becoming more and more popular in strategic financial management as well. Many experts estimate that outsourcing of strategic financial management in Europe, and also leased CFO-services, will increase strongly during the next 10 years.
When would a leased CFO be needed?
A leased CFO might be needed when there is a certain financial management project that would be better managed by an expert from outside of the company, or when a CFO is needed for a certain period, without or until recruiting a permanent employee.
Companies in Russia often face situations when the CFO decides to leave the company at a short two-weeks notice and a leased CFO is needed almost immediately. It normally takes several months to recruit a new permanent CFO, and so in the meantime a leased CFO is a solution that helps the company continue financial management as usual.
Furthermore, in cases when the shareholders want to gain better control of their Russian subsidiary’s business, an outsider is needed, usually a leased business controller. Suspicions at head office are usually raised if the reports delivered by a foreign company’s Russian subsidiary make no sense, or, as in many cases, there are signs that the local management may be running a “shadow company,” competing with their subsidiary and collecting the profit from the operations. A leased business controller can then help to find out what is actually going on in the company and help the client to regain control of their business.
What is required from a leased CFO?
It is clear that the expert who is going to be sent to the client as a leased CFO, or business controller, must have extensive experience of all aspects of foreign companies’ business in Russia, including business environment, government and local administration, business culture with all its dimensions, accounting standards, legislation, risk analysis and management.
This is because this kind of project often includes not just the usual dimensions of financial management, but also many aspects connected to the local business environment and networks.