Plugdin Insights: How The CFO Centre is helping tech firms to grow

Plugdin Insights: How The CFO Centre is helping tech firms to grow

Read time: 7 minutes     

Tech companies often face a lack of financial skills at a key point in their growth, say Matthew Allen, Susan Robson and Raymond Yager of The CFO Centre, a global company supported by BDO

Growth is a key goal for most technology companies. But with rapid expansion comes changing financial requirements. 

Your local accountant or in-house bookkeeper could find themselves out of their depth when faced by big-picture challenges such as how to raise venture capital or manage an acquisition. 

This is when it pays to review the businesses requirements and consider the introduction of an experienced outsourcing provider and chief financial officer (CFO), but not every growing tech business is able to afford such a senior hire early on. 

As Matthew Allen, Susan Robson and Raymond Yager of The CFO Centre explain, there is another option—and it is one that delivering big results for the tech industry. 

What is The CFO Centre?

The CFO Centre is a family-run business that was founded in 2001. 

We work with ambitious, growing companies that need help, guidance and the structure that a CFO or financial director can bring to the business, but cannot justify the £200,000 to £300,000 a year that a high-calibre CFO is going to cost.

We give companies access to those strategic financial leaders, but at a fraction of the cost. They are fractional CFOs. 

"What that means is that the CFO may be working with the client one day a week or a couple of days a month to help the business achieve its growth goals and ensure the structuring processes, scaling systems, improved reporting and investor relations are being delivered."

What value can The CFO Centre offer to growing companies?

The real value we offer is the experience and expertise of the top 1% of the finance profession; our CFOs come from companies such as Apple, Sony and Disney. 

We’ve seen founders who have perhaps the mother-in-law, best friend or a brother as the finance director — and while they are technically competent, they have never worked in a fast-growth business, so the company hits a ceiling. 

Our CFOs provide a strategy to deliver growth. If the company is looking at fundraising, then often banks and investors are asking questions that the incumbent might not be able to answer as they’ve never had to. This is all new to them.

Traditionally, that is because 90% of the tasks of what a bookkeeper or finance manager completes is to review past performance, whereas an experienced outsourcing team will support the CFO or financial director with key financial insight to allow them to focus  their time on a forward-looking strategy. 

They will also make sure the finance team is doing the right things, producing the weekly, monthly and quarterly key performance indicators as the business needs to grow. 

There is no hard and fast rule about when a CFO becomes a vital contributor but most of our clients have revenues of somewhere between £2m and £50m, and our proven team-based solution supports businesses already above that figure and growing.

How can The CFO Centre help technology firms specifically?

There are different scenarios. Sometimes the companies grow so quickly that they find themselves with a gap in the senior team and they realise they must fill it because they have nobody who can provide that strategic input. 

With growth the leaders start thinking about what they want to achieve, whether it’s an exit or to bring in new investment. 

To do this, they need to professionalise the business—and they realise they cannot do this without a senior finance person. That’s why they come to The CFO Centre. 

Here we can give them the best because we have got a massive network and a lot of skills across the 350 CFOs that we have in the UK, who are part of a larger group of 750+ globally. 

Because tech founders tend to be technical people, they don’t always think about everything a business needs to grow. Yet tech is very different to sectors such as retail. 

We sometimes find tech founders are much more ambitious when it comes to growth. They will grow quickly, go down an acquisition route, take an exit and then start again. 

We can be part of the strategic team realising the exit or sale, working alongside teams within BDO.  

What financial pitfalls do you see with fast-growing tech companies?

Some founders don’t really see the value in a finance function or believe they can do it all themselves. 

They don’t quite understand the complexity and think having someone doing the bookkeeping and the transaction-level work is all the business needs. 

When a business looks to outsource  its financial function  it is important the business selects a partner that can add value and insight to the financial output, alongside the provision of the functional requirements. 

We have gone into tech companies making a monthly loss of £100,000 and within six months we have got them making a monthly profit of £100,000, just by reviewing the business and looking at it with fresh eyes.

"That’s the benefit of our experience; we are working with businesses that, if we weren’t now working with and supporting them, would have gone under by running out of cash."

What is the relationship between The CFO Centre and BDO?

We work in partnership with BDO when they’ve got clients that they can see are scaling and would benefit from an experienced CFO who can also provide flexibility without the requirement for a full time appointment. BDO can say, ”You guys are big enough now where I think it’s worth having a conversation with our partners, The CFO Centre.”  

Our CFOs can work with BDO to build best in class finance functions, specialist technical knowledge from overseas accounting and international tax structures. 

What is it like to work with The CFO Centre?

It’s simple. There is no signup fee and no termination conditions, just a one-month rolling contract. If at any point the client feels The CFO Centre is not adding value, they can terminate with a month’s notice. 

We are there to add value and help our clients realise the numbers that really matter.

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