So you need an experienced CFO but you’re not ready to make a long-term hire. Instead, you may be considering the option of a part-time or an interim CFO. Here is the difference between these two approaches to fill your CFO position:
The Part-time CFO works as your permanent CFO but on a part-time basis. 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 a cost effective way to get the financial skill-set you need.
The Interim CFO works as your CFO on a full-time basis but for a limited period of time. Often an interim CFO is used when a full-time CFO position is vacated and the company is in the process of searching for a new full-time CFO. Or, an interim CFO can be used when you need that financial skill-set for a short duration to help guide the company through a particular situation.
When to hire a part-time CFO
A part-time CFO is a good choice when you need CFO experience but the work load does not justify a full-time employee salary. Sometimes you hire the part-time CFO for ongoing monthly services and sometimes you hire the part-time CFO to manage a single 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.
Because they work for multiple clients, part-time CFOs come armed with broad experience. This can be particularly useful when you need an outside perspective on a difficult financial problem. Your part-time CFO may have experience in similar situations with other clients and can use this knowledge to help guide you and your business.
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 company. An individual providing interim services typically joins a company for around 6-18 months to help smooth the transition during a period of change. For example, he or she might assist your business if you are restructuring debt or preparing the company to go public. 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.
You might also consider this option when a previous full-time CFO has left, and you need an experienced financial officer to fill the role until you are ready to make a more permanent hire. If you have a permanent CFO candidate in mind but are taking a cautious approach to hiring, you might hire them for an interim position and eventually offer them the full-time job if they prove themselves.
Value in the part-time CFO approach
The part-time CFO option is less expensive and is often the better choice when looking for a strategic partner to provide ongoing value rather than someone to occupy the CFO position for a brief period of time.