Effective financial management is at the heart of every successful business. It’s a fact that’s especially true for organizations experiencing rapid growth.
While internal accounting and finance teams can manage financial operations in-house, it’s advantageous to leverage the expertise and leadership of a Chief Financial Officer (CFO). A CFO provides the executive experience needed to plan for upcoming financial changes, manage cash flow, boost profitability, and, ultimately, guide your business toward its strategic financial goals.
Of course, hiring a full-time CFO is a big decision — one that carries financial constraints, hiring challenges, and organizational roadblocks. Fortunately, you don’t have to jump into the deep end with a full-time hire.
A part-time CFO, also known as a fractional or outsourced CFO, is an excellent option for many organizations. They provide the same financial expertise and leadership, just in a more part-time capacity.
Of course, there will be distinct differences in each hiring option. In this article, we’ll explore how businesses can best make a decision on which CFO role is right for their needs and uncover some actionable strategies to vet the right candidate.
G-Squared Partners serves as a strategic financial advisor to businesses across various industries and growth stages, providing a sophisticated suite of outsourced CFO, accounting, and bookkeeping services. To learn more about how we can support your business, schedule a consultation now.
The Role of the CFO: Key Responsibilities
Before we dive into the differences between a part-time and full-time CFO, let’s first explore what these financial professionals bring to a business. Here are some examples of key tasks often covered by a CFO:
- Cash flow forecasting and management
- Securing new debt financing
- Managing due diligence processes
- Obtaining 409 A valuations
- Preparing the CEO for board meetings
- Preparing financial statements
- Tax planning
- Cap table maintenance
- Metric/KPI selection and monitoring
This list is by no means exhaustive. CFOs should always customize their approach to the unique needs of a business. No business will have the same needs as another, and as such, a tailored approach to financial strategy is always necessary.
What is a Part-Time CFO?
A part-time CFO is exactly that: part-time. They offer the same level of expertise and guidance, just in a capacity that fits the needs of each specific business. A part-time CFO’s goals will align with the goals of a full-time hire. That means they will increase operational efficiency, save money, and free up resources and time for other leadership roles and internal financial teams.
With the median compensation of a full-time CFO being around $400,000 a year, part-time CFO services offer strategic financial guidance at a far more affordable price point.
Another key difference is that a part-time CFO will come ready with flexible strategies to meet dynamic challenges as they develop. From outsourced bookkeeping to accounting, they provide comprehensive coverage of essential financial tasks, scaling services up and down as needed. It pays to utilize a part-time CFO as the right partner can become a one-stop finance solution.
Part-Time CFO vs. Full-Time CFO
How can a business determine if a full-time or part-time CFO is the right fit for their needs? Let’s explore some of the factors that can help you decide on which route to explore:
- Business Scale: the size of your company is a great starting point. A part-time CFO is a good choice for small to midsize businesses and high-growth startups where cost efficiency is the primary concern. For larger businesses with more complex financial operations, the attention of a full-time CFO is warranted.
- Financial Needs: during periods of heightened financial activity, such as fundraising or M&A activity, a part-time CFO can provide guidance as needed. For steady-state operations, a full-time hire can be advantageous, depending on the scale of the business and its needs.
- Level of Financial Maturity – a part-time CFO can provide excellent supplemental expertise for existing financial teams or offer comprehensive services for businesses without any financial teams on staff. On the other hand, businesses with comprehensive internal teams will likely benefit from an in-house leader.
- Need for Industry-Specific Knowledge: part-time CFOs often come equipped with industry-specific knowledge. For example, G-Squared Partners offers expertise in areas like SaaS and commercial real estate. If you have specific needs in mind, especially in terms of industry expertise, a qualified CFO can make all the difference.
How to Choose a Part-Time CFO
The right part-time CFO covers more than just essential financial tasks; they’ll become a strategic advisor with a wealth of wisdom and guidance. But choosing the right CFO is easier said than done. Here are a few things to consider when selecting a part-time CFO:
- Financial Services Needed: what are your exact financial needs? Do you require basic CFO responsibilities, or do you need CFO services alongside accounting? If so, be sure to find a firm that can cover both.
- Industry Expertise: be sure to partner with a CFO provider who will have expertise in your specific industry. The needs of a manufacturing company will differ significantly from those of a SaaS business, so choose accordingly.
- Analysis and Reporting: the right part-time CFO will deliver industry-specific reports, recommend KPIs, and establish metrics for internal monitoring.
- Interview Insights: during the interview process, pay close attention to how the CFO firm asks questions. This will reveal how their business operates and, more importantly, how they approach each of their client’s unique needs.
It’s also important to bring in relevant team members and individuals whose opinions you trust after the initial interview is over.
Above all, avoid inexperienced candidates, those without specific industry understanding, or those with poor communication skills. This isn’t a simple hire; this is a mission-critical leadership role.
To check all these boxes, go with an experienced and reliable team, like the financial experts here at G-Squared Partners. We’ve delivered exceptional part-time/outsourced CFO services to numerous companies and have the track record and case studies to prove it.
G-Squared Partners: Experienced Outsourced CFOs
A part-time CFO, also known as an outsourced CFO, offers valuable expertise and financial guidance. Depending on the size of your business, your specific needs, and your financial maturity, a part-time CFO can present a strategic option that offers value without constraining your budget.
But choosing the right partner matters. Always choose a CFO who understands your industry and is willing to work with you and your team to define goals and plan for the future. Whether you're a small business or high-growth startup, working with no internal financial team, or just need expert guidance for specific tasks like raising capital or M&A, a part-time CFO can be a great addition to your team.
G-Squared Partners delivers experienced and reliable financial experts who can provide customized part-time CFO services to businesses across various industries. We understand your unique needs and provide only what you require to achieve success.
Contact G-Squared Partners today to learn more about how we can help your business thrive with a part-time/outsourced CFO solution.
