Every growing business eventually needs the right CFO. They can prepare your company to weather storms and capitalize on opportunities. They can also provide answers and analysis to investors and other stakeholders, and they are often an integral part of successfully scaling your business.
However, not every company has the best-fit CFO in place when they are most needed. Your CFO might have left at an inopportune time. You may have a competent CFO who is inexperienced in what lies ahead—perhaps a merger, acquisition or downturn in the market. Alternatively, your company may still be too small to need the position filled on a regular basis, but you need CFO services for a specific time period.
The solution to all these problems (and more) could be hiring an interim CFO.
The Benefits of Hiring an Interim CFO
An interim CFO is different from a fractional CFO. A fractional CFO is a part-time employee your company uses for an extended period of time. On the other hand, an interim CFO is a full-time employee whose term usually lasts only one to three (perhaps up to six) months.
The main benefits of hiring an interim CFO are threefold:
1. Testing what it means for your company to have a CFO on staff.
This allows smaller companies to see if they’re in a position where they need to hire a full-time CFO. It could even give the CEO a chance to focus on responsibilities other than finances or alleviate stressors on other team members who are trying to maintain, rein in or adhere to budgets.
2. Having a qualified professional review the books during a merger or acquisition opportunity.
This allows smaller companies to be certain of their finances, ensure M&A due diligence and optimize valuation going into complex situations like this. The interim CFO can also provide reports to other organizations and stakeholders interested in taking advantage of these opportunities with your company. Best of all, you don’t have to keep an interim CFO on payroll after the dust has settled. They can comb through your finances, prepare the needed reports and documentation, and leave when the deal is complete.
3. Getting a fresh perspective on your organization’s finances from a trained professional.
This gives you a chance to see where your business truly stands. An interim CFO can help your company navigate downturns in the market or upward swings in business, and they can help you prepare to capitalize on these opportunities. Best of all, with their specific expertise, they can show you where you may have been lacking in cost overrides or missed opportunities.
Naturally, there are more than just three benefits an interim CFO brings to a company. Other problems this role can solve include filling the gap between when one CFO leaves and a new CFO is onboarded. An interim CFO can also come in on a per-project basis to get you over the hump during a key planning season or process review.
What Makes an Outstanding Interim CFO
Of course, you want to be sure you’re bringing in the best person for the job. An interim CFO is dealing with one of the most important aspects of your business after all: your finances. That’s why you want to make sure any financial professional you bring into your company is the right choice.
Let’s take a look at an example of a successful interim CFO experience.
A nationwide computer products reseller was having a hard time getting a handle on the precise constraints they were facing. They couldn’t get much clarity around their cash flow reporting or timing, and this was starting to lead to problems with some of their creditors. They needed insights into their financial situation. Enter Craig, an interim CFO with 30 years of experience.
Craig was able to create a presentation focused on how much money the company was losing every hour. He was blunt and honest. This led the leadership team to understand the need to make some necessary changes.
The company reorganized, and Craig helped them build a roadmap for the future. He set up an annual budget for the company, and he developed flash reports for the company’s leadership. In this instance, Craig continued working with the company for 18 months to ensure the roadmap was being followed and adjusted as necessary.
Now, most interim CFO positions won’t last as long as Craig’s did. However, if you’re bringing on an interim CFO, you want to make sure they:
- Have expertise in the situation you need them for
- Have plenty of experience with cloud-based accounting software (because you’ll want their insights and processes available to others), and
- Fit in well with their team and your company’s culture, just like any full-time hire
What to Consider About Interim CFO Services
Most interim CFOs deal primarily with companies that need somebody to come on for a short, defined period of time. This is usually done when something isn’t going well. There might have been a specific catalyst, or the company may have simply realized something is amiss with their financial health.
Of course, not every issue requires a CFO. Sometimes, you may simply need a lawyer to look over a contract, or you might need FP&A support to gain insights without paying for the CFO title
However, don’t let the price tag deter you if a well-qualified CFO is what your company really needs. The service you might get with a low-cost option could wind up costing you more in lost profits, increased risk or other hidden expenses. Sometimes, businesses think they’re saving money, but instead they wind up spending more than they would have if they’d gone with somebody who has the appropriate experience in the areas their business needs help with.
If you are looking for a highly experienced interim CFO, Paro precisely matches companies of all sizes with the right services and subject matter expertise to achieve specific goals. Our exclusive, carefully curated network of remote finance experts provide a range of over 100 financial services, ranging from basic bookkeeping and accounting to highly specialized corporate development and strategic advisory.
