Your business has been rapidly growing and it is now time to consider hiring additional figures in upper management. Perhaps your company is experiencing challenges such as an important project or unfamiliar financial terrain. If you run a startup or a small- to mid-size company, you probably can’t justify hiring a full-time chief financial officer. Outsourced CFO services may be the perfect solution for your business whether you are looking for a part-time CFO to help with special projects, or an interim CFO to come in on a full-time basis.
If you run a medium-sized business, you probably have a CFO. But what happens when you have to navigate a period of financial disruption and that CFO isn’t the right person to see you through it? Or your CFO leaves abruptly in the middle of a critical time? There are many scenarios where outsourced CFO services could be useful to many types of businesses regardless of size.
Let us be clear on a few key differences.
What is the Difference?
Part-time CFOs are financial professionals who provide part-time services to companies on an ongoing basis. They may work only a few hours a week. A part-time CFO is most often used when the demands for a CFO do not justify a full-time salary burden. Hiring a part-time CFO can be a very cost-effective way to get the financial skill-set you need
Interim CFOs, on the other hand, are finance experts who come in usually on a full-time basis. Typically an interim CFO is hired for a certain amount of months to help steer a company through a financial crisis, operations change, preparation for a large sale, or the gap between the current CFO leaving and hiring a new one. Equally, if your company is facing a financial crisis, a seasoned interim CFO provides the necessary financial and entrepreneurial talent to get you back on track.
When to Hire an Interim CFO
You may hire an interim chief financial officer if you need a full-time executive to assist with major changes in your small business. A financial professional providing interim services typically join a company for around 6-18 months to help smooth the transition during a period of change. For example, he or she may assist your company through a merger and acquisition or a cash flow crisis. They may be helpful on a single project or short-term basis, but most likely will not become deeply invested in the company since they are filling the CFO position on a temporary basis.
Hiring an in-house CFO is extremely costly, and companies should take the proper time to ensure each and every candidate would be the right fit. Interim CFOs are a great option during this uncertain period, and you could even hire the interim CFO full time if they prove themselves during the trial period.
Another reason your company might want to hire an interim CFO is to take advantage of his or her specific expertise, such as carve-outs, systems implementation, mergers or acquisitions, or
restructuring in the event the company needs to reorganize through bankruptcy.
When to Hire a Part-Time CFO
A part-time CFO is an excellent choice when you need CFO level talent but the volume of work needed does not require a full-time employee. Sometimes you hire the part-time CFO for ongoing monthly services and sometimes you hire the part-time CFO to manage a single special project. One advantage of hiring a part-time CFO is that the long-term relationship establishes a vested interest in the success of your business.
If you need to raise capital, a part-time CFO with the right experience can help you locate and talk to potential investors, develop your pitch deck and marketing materials, and make sure you have an up-to-date capitalization table. As you hire more employees, you might employ the fractional CFO to help develop and implement your systems and train new staff accordingly. A part-time CFO can set up your bookkeeping account systems, begin tracking your financial activity and provide you with reports and insights on your company’s performance.
Your part-time CFO works with multiple clients and comes equipped with broad experience and knowledge across many different industries. This can be especially useful when your business is looking for an outside perspective on a financial issue.
The importance of the Distinction
One reason to clarify the difference is that some small businesses think they need an interim CFO when they really need a part-time CFO. This could help save the business time and money by only paying for exactly what they need.
It’s also possible that you don’t need any type of CFO services at all because what you really need is a lawyer to review a contract or business agreement. You may also only need part-time bookkeeping support since a CFO will charge you significantly more for the title.
Our final piece of advice to small business CEO’s is that a CFO can be especially helpful if you find yourself doing administrative, finance, and back-office tasks. A CEO’s focus should be on growing the business and extra assistance is absolutely necessary if that is not the case.
Limitless Investment and Capital Part-Time CFO Services
Limitless Investment & Capital provides growing and established organizations with experienced CFO-level talent on an outsourced, part-time basis at a fraction of the cost of a full-time employee. Our CPAs and consultants provide specialized skill sets to navigate times of transition when you can’t afford to be without a CFO. We price our service offerings very sharply at rapid mandate turnaround times and place exceptional quality CFOs, Financial Controllers, and Analysts on the project, by leveraging on our varied and wide resource database pool.