The Guide on How to Hire a Part-Time CFO: When do you need one?
In the modern world we live in today, it is almost certain that a company or a growing business needs to have a CFO because of how such a role not only keeps the finance-related aspect of the business in check but it also provides well-rounded insights and leadership skills that are crucial to help a business succeed in the long term. A CFO’s contributions are a make or break in the business world in the sense that any sort of advice or function one provides affects the core functions of the entire company. In that sense, success can be predicated on having a CFO helping your company.
However, what seems to be the crucial question here is whether you should hire a full-time or a part-time CFO. After all, an executive-level employee such as a CFO is not an affordable asset for your company to have, especially if you are still growing. As such, there is a need for you to know whether you have to hire a part-time CFO instead.
How to tell when you need a part-time CFO:
1. You cannot afford a full-time CFO
The truth of the matter is that not all growing companies can afford a CFO hired on a full-time basis. An employee or an asset that is on the same level of expertise and skill as a CFO will be very expensive and may actually be an expense that outweighs the possible benefits that hiring one may bring. In that case, you may want to hire a part-time CFO instead to help you with the financial aspects of your business on a part-time basis instead since a growing business such as yours may not even need a full-time CFO in the first place.
2. You won’t always need a CFO
Small or growing companies do not need a CFO all the time. There will be instances when a CFO is necessary such as when you will be needing their financial expertise in certain stretches of the month. However, there will also be stretches when a full-time CFO will be doing nothing for your business and will be earning a salary that is not commensurate to his or her contributions during those lean stretches. As such, hiring a part-time CFO may be the better choice for you since you will only be needing them during short stretches.
3. Part-time CFOs are flexible
Flexibility is one of the best assets of a part-time CFO because you can choose to have them on a long-term or on a short-term basis. Think of them as flexible overhead costs such as rental equipment or leased property in terms of their overall flexibility to your company.
4. Part-time CFOs have a lot of experience in various industries and fields
One of the best reasons why companies go for part-time CFOs even though they can afford full-time ones is that they have a lot of experience working in various industries and fields also as part-time CFOs. These CFOs handle many different clients other than your company and can use the experience they have in the other businesses and industries as leverage in case your company encounters problems that are similar to what they have experienced in the past.
5. There are more available outsourced talents
A lot of talented CFOs prefer to work on a part-time basis because they are not ready to commit to small and medium-sized companies because doing so is not as challenging and as financially rewarding as working for multiple growing companies. In that sense, you may be missing out on some talented CFOs if you choose to hire a full-time CFO rather than a part-time one instead.
How to tell if you do not need a part-time CFO:
1. When management thinks freely and makes decisions without the need for a CFO’s insight.
If the company’s management tends to have a free-style approach when it comes to making big decisions in the sense that he or she can come up with plans and strategies on the fly without consulting his or her other executives, then hiring a part-time CFO who won’t always be there for consultation is a waste of time and money.
2. If the company needs everyone to be in the office all the time
Part-time CFOs are part-time employees that work on a part-time basis or when you need them for consultation. That means that they will not be around on a day to day basis and will only be there during scheduled meetings and consultations. In that regard, a company that needs its employees to be there all the time won’t have a lot of uses for a part-time CFO.
3. When the owner or the management can handle the accounting and finances just fine without a CFO
Some growing companies do not need CFOs if the operations are still too small to the point that management can handle the accounting and finances without having to rely on a CFO. In that sense, a CFO will only be an added expense if management is already fine on its own.