Today’s dynamic technological and economic climate has redefined the role of the chief financial officer (CFO) and given companies more flexible options to choose from. Full-time CFOs continue to oversee the finance function while contributing to strategic forecasting and decision making. Meanwhile, growing companies that don’t necessarily need a full-time CFO now have the option of hiring a part-time CFO for specialized functions. To evaluate the need for a full-time versus part-time CFO for your company, consider how each role’s responsibilities differ and where they can best serve your company.
What Is a CFO? Who Are They Within the Company Hierarchy?
CFOs oversee company financial functions such as accounting and financial planning. Unlike accounting professionals who may focus on the everyday financial operations of the company, CFOs help guide major strategic moves based on the financial returns for the company.
At some companies, CFOs may assume additional responsibilities that overlap with functions normally handled by controllers or chief operating officers (COOs), serving as CFO-controllers or CFO-COOs.
Within the company hierarchy, CFOs typically report to CEOs and boards of directors. They oversee finance and accounting team members such as controllers, financial analysts, accountants and bookkeepers.
When a controller is present, the CFO exercises supervision through the controller, focusing on long-term financial strategy and leaving daily operations under the oversight of the controller. When no controller is present, the CFO exercises supervision directly.
What Does a CFO Do? Core Responsibilities
The modern CFO has a range of responsibilities that combine financial oversight with strategic advice and leadership. This gives them a broader set of duties than the traditional CFO, although this remains a core responsibility.
The responsibilities of today’s CFO fall into four major categories:
- Financial oversight: CFOs oversee company financial functions, including accounting, reporting, financial analysis, financial strategizing, financial planning and budgeting. To execute these functions, they supervise other finance specialists and foster collaboration and efficiency.
- Strategic advice: CFOs use their insight into company finances to make financial forecasts and guide critical decisions on matters such as budgets and capital allocation. This requires them to present financial reports, analysis and advice to company leaders and stakeholders, including CEOs, COOs, board members and stockholders. In addition, CFOs will help businesses build strategic business roadmaps, helping them to set goals and metrics for success.
- Leadership: Because their financial expertise plays such a key role in shaping company decisions and performance, CFOs have significant leadership responsibility, both within the finance department and within the company as whole. Within the finance department, their leadership role includes leading finance team culture, development and system integration. Within the company, CFOs act as strategic advisors and financial spokespersons.
- Supplementary duties: To carry out their other responsibilities, CFOs may have supporting duties such as hiring and developing financial talent, working with IT to implement financial systems, reviewing financial data security procedures and preparing financial presentations for company boards and stakeholders.
Part-time vs. Full-time CFO: Understanding Differences in Roles & Obligations
Full-time and part-time CFOs differ in the number of hours they work, their leadership responsibility, and the scope of their accountability. Part-time CFOs, also known as fractional CFOs, typically have more specific spheres of financial responsibility than their full-time counterparts.
Full-Time CFO Obligations
The obligations of a full-time CFO chiefly include:
- Full-time work commitment: 40 or more hours a week overseeing all finance functions
- Upper management leadership: Embedded leadership managing team and operations
- Overall financial accountability: Accountability for their company’s entire financial health and strategy
These duties give full-time CFOs heavy responsibility for their company’s overall financial decision making and performance.
Part-Time CFO Obligations
Part-time CFOs typically occupy a more niched role than full-time CFOs:
- Part-time work commitment: 10 to 25 hours per week of involvement
- Specialized leadership roles: Retained for specialized skills or project needs, such as overseeing the financial side of start-up launches, growth or mergers
- Specific financial accountability: Cost-efficient, targeted support for performance of specialized tasks
Essentially, part-time chief financial officers bring the CFO skill set to bear on priority financial tasks. Fractional or interim CFOs may have a more limited range of responsibility than full-time CFOs, but they can deliver an immediate impact that makes them equally vital to financial performance.
Part-Time CFO Responsibilities
To carry out their role, a fractional CFO may handle responsibilities such as:
- Tackling circumscribed initiatives such as raising capital, budgeting growth or guiding due diligence in mergers and acquisitions
- Conducting targeted financial analyses, such as evaluating infrastructure investment plans, identifying cost-cutting opportunities or projecting revenue growth
- Advising on key financial and strategic decisions such as budgeting, investments, expansions or restructurings
Executing these responsibilities may entail supporting duties such as data analysis, financial forecasting, financial planning, and report preparation.
Full-time vs. Part-time CFOs: Who Should You Hire?
Full-time CFOs and part-time CFOs each offer unique value to their companies. Consider these benefits and potential drawbacks when hiring a finance leader.
The Benefits of Full-time Leadership
Full-time CFOs offer several outstanding benefits to companies:
- Holistic viewpoint: A full-time CFO’s regular involvement with the company gives them a complete perspective on company finances and how they impact the organization’s company-wide performance. The ongoing relationships between the full-time CFO and the broader organization streamline communication and shared understanding.
- Leadership: Full-time CFOs provide management leadership to finance departments and shape upper-management decisions.
- Implementation: Full-time CFOs guide enactment of strategic financial initiatives, planning and supervising their execution from beginning to completion for full continuity.
These benefits make full-time CFOs valuable for companies that need a financial expert with a comprehensive, long-term perspective to analyze trends, steer planning and guide performance on behalf of upper management.
Why a Full-time CFO May Not Be Appropriate for Your Business
Though enterprise companies require full-time C-suite leadership to consistently manage strategic decisions and communicate with stakeholders, smaller organizations may not see full value in the role.
- Cost: The full-time role comes with an expensive salary and benefits package which may be out of range for small businesses.
- Qualifications: A full-time CFO may be overqualified and overpaid if the business is smaller and fills their time with compliance and accounting needs.
- Rigidity: Full-time leadership can be less flexible or adaptable to change, which can be especially impactful if they have a lot of power in the organization.
The Benefits of a Part-time CFO
Where full-time CFOs offer strategic benefits, part-time CFOs can offer tactical advantages:
- Expertise: Part-time CFOs can be hired to provide expert insight and advice in a specific area, such as ESG strategy, acquisitions or digital transformation support.
- Cost: A part-time CFO can deliver expertise at a lower cost than a full-time CFO, often with the same level of experience.
- Flexibility:Fractional CFOs can offer flexibility in terms of the responsibilities they handle, the hours and location they work and the technological resources they leverage.
These benefits make fractional CFOs valuable both for growing companies not yet in need of a full-time CFO or established companies with specialized needs.
Special Considerations for Hiring a Part-time CFO
Businesses may have some trepidation about the value that part-time CFOs can offer. For example,
- Availability: They may not be available for day-to-day fire drills, or their schedules may result in attention gaps. Businesses should set role expectations upfront, schedule frequent check-ins and maintain the capabilities of their in-house team.
- Short-term focus: Depending on how the arrangement is set up, a part-time CFO may lack long-term strategic involvement. Businesses should define their long-term goals and align on quarterly tactics with their CFO.
- Ramp-up time: It may take time for the CFO to get up to speed on company details, so outlining top priorities, sharing background context and introducing your CFO to the larger team is crucial.
Matching Business Stage with CFO Model
Although full-time, part-time and hybrid CFOs can be useful to companies at any stage of growth, their respective strengths make them especially suitable for organizations with specific needs:
- Companies in an earlier stage of development or a rapid growth phase may find that a part-time CFO can serve their needs as an interim strategist.
- Mature companies often need a full-time financial steward.
- Companies that need to prioritize improving efficiency or cutting costs can benefit from a hybrid CFO-COO.
These options are not mutually exclusive. For example, a full-time CFO may find it strategic to bring on a part-time CFO to assist with a specific short-term project.
Find the Right CFO for Your Needs
No matter what stage of growth your business is in, Paro can help match you with the right financial leadership, whether you need a part-time, temporary full-time, or hybrid CFO-COO. Paro’s network of elite finance professionals provides strategic advisory for companies in all growth stages, matched to your needs by our proprietary AI-powered platform. Whether you’re looking for an expert to help you increase your profits, obtain financing, manage a transition or integrate your finance and operations, Paro can help you find a CFO with the skill set and flexibility you need.
