Small (and sometimes not so small) business owners will tell you that the one thing in common that keeps them up at night is the “B word” – B for bottomline. Cash is king, and for the continued survival of any business, revenues need to grow, and costs kept in check, or even reduced.
C-suite executives (save for the co-founder(s) himself) are probably the furthest thing from their minds, as they struggle to keep themselves afloat as a matter of priority. The age-old concept of “needs vs wants” – this delicate balancing act that must be performed on a daily basis holds particular relevance in respect of one particular C-suite executive – The CFO. Is he a need, or just a fancy want? Arguably, his expertise in the realms of budgeting, forecasting, financial reporting, tax advisory, among others, is essential for any business. But as we all know, nothing good comes cheap. So for many out there, especially the non-financially trained, engaging a CFO is nothing more than a lofty dream. Or so they think.
Enter the rise of the part-time CFO.
There has been a growing trend of CFOs lending their expertise to a host of SMEs on a part-time basis, sometimes even remotely. This is in line with the gradual growth of the ‘gig economy’ – in other words, aided by technology, subject matter experts, such as the part-time CFOs, come in at the appointed time and fix problems and provide direction. It could be at the end of the month, when a high level analysis of the Days’ Sales Outstanding number or Profit margin is required, or at a quarterly board meeting, where a decision has to be taken on changing the depreciation method of the firm. This optimises the use of the CFO’s talent, in a targeted, results-oriented manner. Although not cheap, costs are definitely lower than having a full-time professional on the payroll, with the same results achieved!
When to consider having a part-time CFO?
- You find yourself stuck, or spending too much time on the financial process
- You are on budget
- You are open to ‘contract-for-service- arrangements
- Your transactions are increasingly getting complex
- You are experiencing rapid growth
- You are preparing for a merger or acquisition