A CFO (CFO) job is a crucial element in the growth of any company. A successful CFO will take time to study the financial activities of his/her company and also its position within the marketplace. This information informs crucial financial decisions made by the CFO that can be the main factors that drive business growth.
However, the expenses associated with a CFO position usually make it beyond the reach of many smaller firms and new businesses. Certain companies opt to skip having a CFO in the first place, opting to let the chief of the business take the decision-making on financial matters with the assistance of an accountant, CPA or accountant or any other less knowledgeable financial expert. Similar to taking an excursion without turn-by-turn directions from GPS, this approach could result in poor financial management that can lead the business off track.
Benefits
Cost-Savings
Finding a competent CFO can be expensive. Between the posting of the advertisement, conducting multiple phone interviews, inviting candidates from all over the country, or even the region to conduct multiple rounds of interviews as well as making packages of offers The financial burden will quickly add up. For companies that haven’t had a CFO before operating inefficiencies could increase the cost further.
When a potential candidate receives an offer, and accepts it, there is the possibility that the candidate may not be a great match for the job or for the entire company. In this case it is possible that the costs will continue to rise since the employee needs to be dismissed or his or her performance monitored out and the process has to begin again. The wrong choice of employee could lead to a snowballing of costs.
Even if the process runs well, the huge cost to cover the CFO’s salary and benefits each year is incredibly high for many small to medium sized companies.
A part-time CFO reduces the expense burden of having a full-time CFO since companies can cut out hiring and recruitment expenses, and the pay. Additionally, since they are an employee of a third party the company does not have to cover benefits or think about providing costly benefits to encourage retention when employing the services of a part-time CFO.
Immediacy
As time is precious it is imperative to hire an interim CFO is a cost-saving measure. If a company recognizes the necessity for a CFO but is unable to start the search process right away hiring a part-time CFO will provide immediate assistance while an thorough hunt for an permanent CFO will be carried out. In the event that the current controller or vice president of Finance or CFO departs abruptly, a part time CFO, Controller , or VP Finance could be brought in to ensure that the company’s finances are operating efficiently.
Being able to provide an immediate solution to the requirement for an immediate answer to the requirement for CFO can also ease stress. If a business is planning to establish CFO positions in the very first instance, having the ability to swiftly bring in a professional to the job that has been thoroughly vetted is a great relief.
Flexibility
Some businesses choose to hire a part-time CFO for more flexibility in the job. In contrast to an in-house CFO which is in charge of all finances and oversee the company, a part time CFO can carry out a range of financial tasks. Employing only for what you require, and when you require it, is an a la carte financial solution that a lot of companies love. This results in an affordable catered service that is suitable for small-sized businesses.
Experience
A finance and executive recruiting firm is naturally better in attracting and screening top candidates than the typical business that is looking to recruit the CFO of its company. This results in the ability to hire a highly experienced financial professional who has worked in relevant industries or kinds. This is an important distinction since you will be placing the success of your company in their control.
Did you know? FD Capital can help when looking to recruit a London part-time CFO.
Ideal Scenarios
Entry Point
Businesses looking to employ a full-time CFO may start with a temporary CFO in order to help their employees adjust to the new role. Also, hiring an external CFO will help define the requirements of the permanent position. This results in a more defined job that will be more likely to draw and keep top talent as well as ensuring an ongoing economic success for the company.
Similar to renting an apartment prior to purchasing a home, hiring the part-time CFO option prior to moving to a full-time job puts off the cost until the business has increased its profits enough to pay for the cost. For companies with low cash flow that are struggling to meet their financial goals, this approach will free up funds needed to invest into the business during critical expansion periods.
Transition Management
Transitional times are excellent occasions to bring in a part-time CFO as they bring specific financial challenges that require experts. They include, but are not restricted to:
> Reaching newly-established revenue targets
> Securing financing from outside
> Opening new locations
> Expanding into new markets
> Investing large amounts of capital
> Involving hiring waves
> Entering into new partnerships
> Navigating mergers and purchases
> Relocating business headquarters
Although the financial demands of day-to day operations of smaller companies and startups are usually managed by a controller, accountant or VP of Finance in transitional circumstances, these situations require a higher level of expertise. Employing a part-time CFO for a time of transition or a specific project can provide the ability to specialize in a way that’s not available in a larger CFO job in the company.
Limited Engagement
The majority of top finance professionals who are looking to be C-Suite-level employees are searching for jobs that will last. When selling a company, professional finance support is only required for a limited duration. This type of limited engagement model is ideal for the position of an interim CFO. Employing a CFO when selling the business or another type of short-term contract is a low-cost solution and an effective method of gaining access to the expertise of a seasoned CFO. Additionally, it guarantees that the CFO remains committed to the business instead of splitting his or her time between his or her job and looking for a new job.
Software Support
If a company has to upgrade or change to a new accounting system or software A part-time CFO is able to take charge of the transition and manage any issues that may arise in the process. This provides a solid base for the performance of the business. This results in an easier transition as well as clearer statements following.
For many businesses that are in need of financial help, it’s more beneficial hiring a part-time controller or controller. Utilizing a third party financial services company to “lend” an accountant is an efficient way to find top talent to perform crucial tasks such as creating business financials and enhancing the accounting software, managing an acquisition or merger, seeking out lenders, expanding the business operations, and taking crucial financial decisions that are time-sensitive.