Many owners and managers are hearing about Part-Time CFOs for small to mid-sized business, so what are the benefits of such a solution? Let’s discuss the why, what, when, as well as the goals, for a Part-Time CFO, also known as an interim, fractional, or outsourced CFO.
Why Engage a Part-Time CFO?
Hiring full-time employees is very expensive and can be risky. With the advent of cloud-based tools that make collaboration easier, companies can now have ready access to a Part-Time CFO resource. Accounting departments are typically busy and at capacity with the day-to-day tasks of the business. A Part-Time CFO offers built-in efficiencies in purchasing the skill sets and bandwidth needed at any particular time.
What Do You Get with a Part-Time CFO?
With a Part-Time CFO level resource, there is increased oversight of the accounting department. Through the development and refinement of policies, procedures, and technology, a company can benefit from increased efficiencies, reduced timelines, and added scalability. The company also benefits from a higher level analysis with the additional reporting metrics of projections, profitability, and scenario planning. The CFO role improves the communication with lenders and investors and supports the operational functions of the business with robust data reporting and metrics. In small to mid-sized business, they will often be very hands on, and possess excellent communication skills.
When Do You Engage a Part-Time CFO?
There are some distinct indications that it might be time to consider a CFO role for your company. If timely and accurate financial results needed to make business decisions are consistently delayed or inaccurate, it is time to add additional bandwidth to the department. This can often be caused by rapid growth, or the number and complexity of transactions increase. Lenders, investors, customers, and vendors may request detailed and specialized reporting, or when the engaged CPA firm may be requiring additional schedules and data. If the company is preparing for some type of exit, succession or transaction, having the CFO resource available to assist and guide the due diligence activity can ensure a timely and accurate process.
The goals of hiring the CFO function can usually be summarized by quantifying and reducing risk to the organization, lowering costs to increase profitability and cash flow, and ensure that the long term company strategy is executed and results realized. By utilizing a Part-Time CFO solution, business owners and managers can realize these benefits at an earlier stage and more cost-effectively than waiting for a full-time CFO role to develop.
We Can Help
If your business could benefit from a Part-Time CFO, contact Signature Analytics and we would be happy to discuss our outsourced CFO services. We will set up a consultation to learn about your specific business needs and can discuss the best outsourced CFO services for you!