Hiring an Interim Chief Financial Officer or CFO has been a growing trend over the last twenty years because it provides many benefits to the company. Interim CFOs are experienced executives who fill in temporarily or on a periodic long-term basis.
The most common initial reasons companies obtain interim CFOs is due to experiencing transition and financial issues.
Companies rarely can replace their CFO quickly. The company needs time to properly vent and hire a proper replacement. During this transition, work still needs to be completed. Having an interim CFO who can parachute in and fill in the temporary void can be vital.
Financial issues can be a result of external factors for example Covid19 and the 2008 Financial Crisis, or Industry changes or Internal corporate issues, such as, dramatic sales growth or contraction and cash flow challenges. This is when they need someone to come in and help them get back on track, quickly and efficiently.
Outside of emergency situations, Interim CFOs can function as a long-term trusted advisor to the Owner or Executive. In addition, manage, guide, and train the internal accounting department.
Virtual vs. In-House Interim CFOs
COVID has accelerated and made the virtual interim CFO option more acceptable to businesses. A virtual CFO provides accounting management services, such as, defining cost controls, working with finance, accounting staff and operations, managing new projects, creating financial dashboard reports, budgets, and forecasts, establishing departmental strategy goals, and documenting process improvement initiatives are just a sample of what tasks an interim CFO can do virtually or on-site. Client interaction can be achieved through telecommunication platforms such as Zoom and GoToMeeting. On top of this, all accounting management services like QuickBooks and other accounting applications can be hosted in the cloud in a secure environment. With these improved and secure methods of online interaction, clients can obtain access to an experienced CFO or bookkeeper from anywhere in the US, wherever you are located. Additionally, companies, if needed, can hire more than one virtual CFO at a time to provide more specialized services.
The clear difference between a virtual CFO and an on-site CFO is geographical proximity. While most tasks and job duties can be done virtually, some require having a physical presence. Managing an audit and managing less independent and experienced accounting staff are examples when being on-site would be required. While the Owner or Executive may have a normal inclination to have the interim CFO on-site, the task(s) required may or may not need a physical presence to achieve the desired objective.
Here are a few quick things to think about when you are considering virtual vs. on-site CFOs:
1) Communication styles – Virtual CFOs offer a convenient approach to interacting with your team than traditional, on-site CFOs might. Virtual CFOs do not need to be on-site with the rest of your team, which means that they can work remotely with more time flexibility. Virtual CFOs are often entirely web-based, and they can be contacted by zoom, phone or email.
2) Availability – In general, having a virtual CFO might be the key factor you need to consider for your business. Ease of access to qualified industry experienced CFOs. They can be contacted from anywhere in the US.
3) Cost- While both will charge for the hours worked, if you need an on-site interim CFO for less than a day of work, it might be difficult to obtain a qualified CFO. On the other hand, if you need random periodic higher or sustained lower hours of support the virtual interim CFO might be the best option.
An experienced CFO with industry knowledge who is available full-time is going to cost you a lot more including benefits and employer taxes than if you contract someone part-time to do the key job tasks from their home office. In addition, the company may not have enough hours to support a full-time CFO. In general, most companies find that hiring an interim virtual CFO is very affordable compared to traditional options.
Interim CFO services are a valuable resource for any company. They can provide stability for the company that is hiring. Interim CFO services are a wonderful opportunity for any business in need of some extra help in the finance department. Contact Consult Your CFO today!