By definition, a Chief Financial Officer (CFO) is a senior level finance professional who is accountable for your company’s complete financial operations. Their duties include preparing financial statements, developing business strategy and measures, monitoring cash flow and expenses, and providing professional financial advice.
It is common that a growing company may not have it in their budget for a full-time CFO. However, there is the need for a CFO’s expertise in guiding business decisions and developing the company’s financial structure. It is also true that having access to a CFO is a solid investment in your company’s future growth.
As you research options for CFO services, though the terms are often used interchangeably, there is a difference between part-time (fractional) and interim (temporary) CFO services. Part-time and interim CFO services are also called outsourced, which means contracted services hired from outside the business. Both of these options may be hired virtually as opposed to having to visit a traditional brick and mortar.
Utilizing the outsourced and virtual options can help smaller companies hire from a larger pool of potential CFOs who may have experience in their field or industry.
Let’s examine the part-time and interim options a bit closer.
What defines a part-time CFO
The part-time CFO has full-time experience as a CFO, but now works on a project basis and receives compensation hourly or through a contract. They work with one or more small companies that are not large enough to support a full-time CFO.
When do you need a part-time CFO
You might need the part-time services of a CFO if:
- You want to develop short and long-term financial plans as well as risk-management strategies to push your business forward.
- The company is experiencing growth but needs to raise capital to expand. A CFO can interpret financial reports and offer guidance on which course of action to take. You need a financial expert to oversee your bookkeepers and accountants as well as help develop policies, procedures and practices geared toward growth.
- A complete financial picture would help guide your decisions, risk-taking and budgets.
- The company is considering making large capital purchases.
- You want the comfort of knowing an expert is keeping an eye on the company’s financial picture and will communicate issues before they become problems.
What defines an interim CFO
An interim CFO is an experienced CFO who is hired for a short, specified period of time, usually under six months. They are typically sought after when a company has some type of issue or problem and needs temporary assistance.
When do you need an interim CFO
- Interim CFOs are used to fill gaps left by the departure of the full-time CFO until a permanent replacement can be hired.
- If a company is going through an issue that needs expert financial guidance such as a merger or acquisition, bankruptcy, major operational change or financial difficulty, having someone in the CFO role can help smooth and guide the process.
What should I look for in a candidate for any outsourced CFO services
While your needs and financial goals will help shape your search for CFO services, basic qualifications should include:
- A Bachelor’s degree in finance, operations, research, statistics, math, economics, or related analytical discipline preferred
- Master’s degree in accounting or business administration, or equivalent business experience
- Prior experience as a CFO, preferably in your company’s size range and industry
- 10+ years of progressively responsible experience
- Ability to see the big picture
- Excellent spoken and written communication
What will the outsourced CFO cost
Several variables go into determining an estimated cost. Before making a decision, you should consider:
- How much work do you realistically plan to give them?
- Is your business growing? Growth impacts numerous factors such as cash flow, forecasting and budgeting.
- How large/complex is your business? Your industry?
- Are your financial systems current and do they support your current level of business? Is growth factored into that infrastructure?
- Will your current staff require financial advice, training or oversight?
- Will the fractional CFO need to develop and implement an overall long-term financial strategy or does one currently exist?
- Do you need significant work done on company policies?
- Are you simply between CFO hires and just looking to fill that gap on an interim or temporary basis?
You also can structure your part time CFO to work intermittently. Perhaps you only need an outsourced CFO on a temporary basis and once they set up some best practices, you can hand most of it off to an accounting manager to implement the CFO’s vision. Maybe you only have the CFO set up to work on projects once a quarter or even annually.
While the cost will ultimately boil down to the scope, complexity and hours of work, you can typically figure to invest from $1,000 to $10,000 per month for an experienced part-time CFO.
Ascension CPA can provide the help you need
Ascension has the qualified candidates you need for your company’s CFO services! They bring decades of experience to help your business succeed. Their goal is to give business owners the opportunity to focus on their passion, not their finances.
Book a consultation for CFO services today!