“I have no use for bodyguards, but I have very specific use for two highly trained accountants”
– Elvis Presley.
Nowadays the companies are challenged with a very hostile business environment, pressing a number of tasks and growing demands by stakeholders. In order to stay afloat in such environment, the companies have to be agile and address their internal processes proactively. Whether it is a small start-up or a company experiencing growth, the managers have to pay attention to all aspects of business, ranging from sales and marketing to supply chain and HR. Amidst this chaos, it is easy to forget about the financial side of the business, which might be paramount in achieving success.
It is crucial to have someone in the team who is able to manage company’s finances and keep financial house in order. That does not necessarily mean just having an accountant or a person with good number crunching skills. it means having a seasoned financial professional, who will be able to look at company’s big picture goals from the financial perspective. Hence, it does not come as a surprise the companies want to hire a full-time CFO in the early stage. Although, this move makes sense, as bringing in CFO early gives an opportunity to capitalize on their expertise, sometimes it may prove to be a wrong decision, especially for companies that are on a tight budget or with uncertain future. Instead, most companies consider hiring Interim CFO (or part-time CFO), who can act as a leader on financial matters and put the company on a path to a success without burning too much cash for overhead costs.
The companies may consider hiring Interim CFO in the following cases and most of the cases would be on a part-time basis:
- The company is in start-up stage or experiencing growth. If the company is experiencing rapid growth or is planning to raise funds from external investors, having well-established accounting practices in place is paramount. With the growing number of transactions and business opportunities, the companies may realize the need for the experienced financial professional within their team.
- The transition period between CFO changes. Hiring a full-time CFO is a time-consuming process and can easily take several months. In the meantime, the company needs to have a professional, who will be able to take over and keep running company’s finances and accounting.
- Special projects and events. Companies may experience certain complex transactions, such as M&A, restructuring, venture fundraising, or a major expansion. Having an experienced financial professional will help the company to go through the change successfully and achieve targeted results with relatively fewer mistakes.
- Private equity or cross-border expansion. Nowadays many companies tend to expand their geographical presence. The example will be international companies or private equity firms buying stakes in Canadian companies. Usually, these firms prefer to outsource accounting and finance services to professional firms with proven track record of achieving results. By doing this, the companies avoid dealing with the hiring process, which might take a considerable amount of time and resources.
Five benefits of hiring Interim CFO
The benefits associated with hiring Interim CFO for part-time basis include:
- Less cost. This is one of the most important advantages why the companies would want to hire Interim CFO on a part-time basis. Hiring a full-time CFO means the company will need to commit to a candidate who may prove to be a wrong fit for the company and pay significant salary on top of applicable bonuses, stock options, and other benefits. Instead, the company can hire interim CFO without having the commitment, which eventually turns out to be a cheaper option. An interim CFO can cater to the business needs on hiring company’s needs and get all the know-how without the added costs.
- Adding experience and expertise to the team. If the company happens to outsource interim CFO with prior experience in wide range of industries, or a professional with auditing background, it may bring in a diversified experience and expertise with best practices and high industry standards. Many companies can get stuck in a financial routine and remain unaware of best practices. The interim CFO will be able to bring in a fresh perspective on the business from prior projects and experiences and put the company on a path to success with less effort than an internally grown candidate.
- Objective views. Lack of bias towards the company will allow interim CFO to make objective decisions. This is very crucial when it comes to strategic options evaluation to improve the performance of the company and it is expected that the interim CFO will act in the best interest of the company due to the absence of future ties to the company and/or involvement in internal politics.
- Big picture strategy. Thanks to extensive experience, interim CFOs are able to quickly develop an understanding of the company’s financial performance and elaborate solid financial plan to achieve targeted results. They provide a bird-view assessment of the company and apply a top-down approach to dig into details that are crucial to company’s financial success. The difference with full-time CFO is that company can do this activity with part-time interim CFO at less cost to the company.
- Focus. Given the temporary duration of the assignment, the interim CFO is often focused and driven to provide results to the Management. The focus might not be limited to only accomplishing tasks, but to also build a strong financial foundation and creating a solid ground for a future handoff to the existing staff or an eventual replacement/graduation.
If you are interested in learning more on benefits of Interim CFO, please contact PFC Accounting:
- e-mail: email@example.com
- call us: +1(403) 375 9955