When your business has grown for a while, you reach a point where you need extra financial expertise in your corner. Unfortunately, this often comes well before you need (or can afford) a full-time controller or CFO.
Fortunately, there’s a handy solution: Contract CFOs.
First things first: What exactly is a CFO?
A CFO is a chief financial officer. Their responsibilities can vary but generally consist of managing and overseeing the financial situation of a company.
A company may also employ bookkeepers, accountants, CPAs, or controllers to handle the nitty gritty—monitor expenses, keep the books tidy, reconcile bank accounts, etc. A CFO, on the other hand, oversees the big picture. They make sure that the company’s financial health is managed in a way that aligns with the company’s long-term business goals.
For example, let’s say a CFO has successfully developed and implemented pricing and/or cost-cutting strategies to get a company making good profits. A CFO might then have to decide whether those profits should be:
- Distributed to partners or shareholders of the company,
- Passed out as incentives and bonuses amongst employees and staff, or
- Invested in new equipment or new facilities.
The CFO has to determine how much money is really available, then factor in potential risks and rewards when choosing how to spend it. Which opportunities have the most upside based on analysis and market research? Which could cause the most trouble to the company if it didn’t pan out? Is it worth taking the chance?
They may even broker deals with investors, then help with structuring those same deals. For example, a company might want to finance growth by offering equity (stock) in the company in return for cash. Alternatively, they might decide that bank financing is a less expensive or more viable source of funding the growth. That’s the sort of question a CFO handles. He or she will often manage banker and investor relationships, keep track of everything from the cap table to financial projections, and report back to other C-Level officers or the company’s Board of Directors.
In short, CFOs oversee the lifeblood of the organization: cash. That takes a lot of study, know-how, and strategic planning.
How a Contract CFO Can Help You
You can already see that CFOs have plenty to keep them busy. You can probably also guess that some companies—especially smaller ones—can’t afford to employ a full time CFO. Highly seasoned CFOs can be very expensive employees. Their salaries are justified by the value that they create, but that isn’t much consolation to those who simply can’t afford them.
But those companies often still need the specialized skill set a CFO offers. Businesses rise and fall based on cash flow, and applying the right strategy at the right time can mean the difference between a profitable year and a catastrophe. That’s the sort of thing it takes real expertise to manage.
So in the recent years, some CPA firms have started to offer on-demand contract CFOs or fractional CFOs. Regardless of the terminology, the core concept remains the same: a part-time CFO—who serves the same functions as a full-time CFO, but without the costs of a full-time salary with benefits.
Why is this good news for you? Well, it means you can hire a professional financial consultant for ongoing analysis and management of your business and financial prospects. By identifying risks, opportunities, strengths, and weaknesses, the contract CFO can help you see how your business habits and financial controls are moving you toward your goals—or pushing them farther away.
- You benefit from the expertise of a professional CFO.
- You pay a fraction of the cost of hiring a full-time CFO in both salary and overhead.
- You can use the money you save by hiring a contract CFO for other high-priority initiatives.
- The contract CFO can tailor their skill set to your specific needs.
Do you need a contract CFO?
There are quite a few reasons you might want the services of a contract CFO. For example:
- You need the proven experience of a highly-skilled accounting or finance professional to meet specific challenges and reach specific goals.
- Your business can’t afford the cost of a full-time CFO yet.
- Your business doesn’t yet need a full-time CFO.
- You only need a CFO on an interim basis, for a single project, or for a brief period.
As you can see, contract CFOs are a solution to a wide range of potential business problems.
Ready to let a contract CFO take your business to new heights?
If you’re looking for a contract CFO, we’d love to help. Our team of seasoned veterans can give you the information you need to find the right solution to your unique challenges.
Please reach out to us, and we’ll get started right away. We’ll put our years of education and experience to use for you.