Does Your Company Need an Outsourced CFO?
Corporate finance is a very sensitive matter and if it is not well-managed it can kill even a successful business.
In case when the company needs support for managing their results provided to the authorities through accounting, financial reporting, or cash forecast, they could consider hiring an onsite CFO for China, however, there are certain crustal requirements. Besides the general requirements that are mentioned in the most CFO job descriptions, for China unfortunately it is not enough to manage company’s financial part sufficiently.
If to consider a foreign CFO in China, he should be able to understand local fast-moving regulation of accounting principles. Even if rules are quite similar to international financial standards, in theory, the reality is that re rules are lying in tax bureau hands which are more tax-oriented on their analysis. So, in the end, small differences can have a very significant impact.
To be able to understand these differences, a deep understanding of PRC GAAP structure and applications should be necessary as well as a possibility to receive and understand the new regulations. For that, a good knowledge of Mandarin is important but not enough to understand the idea behind the rule and the way it will be implemented.
In case of hiring a Chinese CFO is not always a solution, as the language and the fast-moving environment are not the only issues. Even trained in Occident, there is a high chance that they will stick with a local pragmatism which is not always aligned with Company management needs in terms of financial standards.
There is a high risk in case of CFOs not being up to date with regulations, or won’t have enough knowledge and skills to translate local financial statement to the HQ abroad, what is not something that most companies want in case of their financial department.
CFO’s role is not easy, and there is a tremendous need of skills, specific and deep knowledge, vision and pragmatism that now everyone has. And of course, there are people who passes most of the needed requirements, but there are simply not enough of them, and when there are it will be a very pricy solution for the company.
What would be the solution? For every company is different and it purely depends on the needs and what state of the company at right now.
However, outsourcing is one of the solutions that can help company to have a well-trained team that can merge all these competencies on a regular basis, backed up with local CPA experts, report clearly to the company’s management, save costs and most importantly bring the needed clarity for company to continue to grow and develop.
Contact us to see how outsourcing can support your company.