Your business has reached the point of needing a seasoned CFO, but you’re not ready to make a long-term hire. Instead, you may be considering the option of either a part-time or an interim CFO. Here is the difference between these two approaches to fill your CFO position:
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 a CFO skill-set is needed for a short duration in order to help guide the company through a particular situation.
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
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 but offer them the full-time job if they prove themselves during a trial period.
When to hire a part-time CFO
A part-time CFO is a good choice when you need CFO level experience 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 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, which can be particularly useful when you’re looking for an outside perspective on a difficult financial problem. Your part-time CFO may have experienced a similar obstacle with another client and can use this knowledge to help guide you and your business. This allows them to become a strategic partner to your CEO.
Value in the part-time CFO approach
Not only is a part-time CFO less expensive, but it’s often the better choice if you are looking for a strategic partner that provides ongoing value to your business rather than someone to briefly occupy the CFO position until you fill it permanently.