A CFO (CFO) job is a crucial element in the growth of any company. A competent CFO takes time to study the financial activities of his/her company, and its position within the marketplace. This knowledge is used to make crucial strategic financial decisions , which are usually the most important factors that drive business growth.
However, the expenses associated with a CFO position usually make it beyond the budget of many small firms and new businesses. Some businesses opt to not employ having a CFO in the first place, opting to let the chief of the business take the decision-making on financial matters with the aid 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 inadequate financial management, which can lead the company off.
Benefits
Cost-Savings
Finding a competent CFO can be expensive. Between putting up the job advertisement, conducting multiple telephone screenings, inviting candidates from across the country or region to conduct multiple rounds of interviews as well as making offers and financial commitments, it could quickly grow. For companies that haven’t had a CFO before operating inefficiencies could increase the cost further.
When a potential candidate receives an offer and decides to accept there is a chance that the individual may not be a great candidate for the position or for the entire company. In this case it is possible that the costs will continue to increase since the employee needs to be fired or their performance analyzed and the process has to begin again. Employing the wrong person could result in a snowball effect of expenses.
Even if the process runs smoothly, the cost to pay the salary and benefits of a CFO each year is incredibly high for many small to medium sized companies.
The option of hiring a part-time CFO reduces the expense burden that comes with an all-time CFO as the business can avoid the hiring and recruiting costs, in addition to the pay. Additionally, since they are an employee of a third party the company does not need to provide benefits or think about providing costly benefits to encourage retention when using an interim CFO.
Get in touch with our team when searching for a London part-time CFO.
Immediacy
Because time is a valuable commodity and time is money, hiring part-time CFOs is a cost-saving option. When a business is aware of the necessity for a CFO but is unable to initiate the search immediately hiring an interim CFO can provide immediate assistance, while an thorough hunt for an permanent CFO will take its time. Also, if the existing controller or VP of Finance or CFO departs abruptly, a part time Controller, CFO or VP Finance is able to be hired to ensure that the company’s finances are operating efficiently.
Being able to provide an immediate solution to the requirement for the need for CFO can also ease stress. If a business is planning to establish CFO positions in the very first instance, having the ability to quickly hire a competent 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 who is responsible for all finance operations and oversight of the company, a part-time CFO can carry out a range of financial tasks. The hiring process is based on what you require, and when you require it, is an a-la-carte finance solution that many businesses appreciate. This results in an affordable catered service which is ideal for small-sized businesses.
Experience
A executive and financial services recruitment company will naturally be better in attracting and screening top candidates than a typical company that is looking to recruit their own chief financial officer. This results in the ability to recruit a seasoned financial professional with experience working in the relevant industry or kinds. This is a significant difference because you are placing what’s to come for your company in their control.
Ideal Scenarios
Entry Point
Companies that are looking to hire an experienced CFO on a full-time basis can start with a temporary CFO in order to help their employees adjust to the transition. In addition, hiring an external CFO will allow you to define the requirements for the permanent job. 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 house, employing the part-time CFO option prior to moving to a full-time position delays the expense until the company has grown its revenues enough to pay for the cost. For businesses 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 growth times.
Transition Management
Transitional times are excellent occasions to bring in an interim CFO since they pose specific financial challenges which require the expertise of specialists. They include, but are not restricted to:
> Getting new revenue targets
> Securing external financing
> Additional locations are being opened
> Expanding into new markets
> Investing in large capital projects
> Involving hiring waves
> Entering into new partnerships
> Navigating mergers and purchases
> Moving the business headquarters
Although the financial demands of day-to day operations of small-sized businesses and start-ups are generally managed by a controller, accountant or VP of Finance Transitional situations require a higher level of expertise. The hiring of a part-time CFO for a time of transition or for a particular project provides the ability to specialize in a way that’s not available in a larger in-house CFO position.
Limited Engagement
Many top-notch finance professionals searching 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 certain amount of time. This type of limited engagement model is ideal for the position of an interim CFO. Employing a CFO when selling the business or another kind of short-term commitment is an efficient and cost-effective option, as well as an effective method of gaining access to the expertise of a seasoned CFO. In addition, it ensures that the CFO is committed to the business instead of splitting his or her time between the job and looking for a new job.
Software Support
If a business needs to update or move to a new accounting system or software A part-time CFO will lead the process and deal with problems that come up in the process. This creates a solid foundation for the finances 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 to employ a part-time CFO or controller. Employing a third-party financial service company to “lend” an accountant is an efficient way to recruit top talent to fulfill important 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.