hiring a part time CFO ? 3 questions to ask

hire part time cfo

 

3 questions that a business owner should ask a candidate before hiring a part time CFO :

  1. Have you been a CFO /Finance Director of a similar sized company ?

The skill set of a Director of an SME is very different from that of a large company and ideally a CFO should have worked in an SME or it may not be a very good fit from the start. The needs of SME businesses (I would say revenues anyway between $5m and $70m) are very different from large businesses. The executives in SMEs are closer to the business, are normally owners, have less politics and more hands-on operational experience of the business and have to dig into many different parts of the business without a lot of internal or external support. They may also have  faced hard challenges like meeting payroll. Many part time CFOs have different backgrounds, in consulting or large multinational companies with large teams to help them which is not necessarily a good fit to be a SME CFO – a financial controller at a large multinational has a very different skill set and mind set than a CFO at an SME. Myself and my team have been there at the coal face of financial management at SMEs and faced real obstacles and come through them.

 

  1. What do you do for a full time job ?

Ensure that your part time CFO is doing it on a full time basis and not moonlighting from another role. Many people in this business already have full times jobs, and they are not necessarily as CFO’s or even in finance. They are essentially moonlighting and may be available at odd hours in the evenings or weekends or taking leave in order to look after your business. That’s fine until you need them more for a project or crisis situation, or until their own job needs them more. My first assignment at CFO Counsel came as a result of a business owner looking for a replacement CFO  – he had had 3 CFO’s supplied by the same company in 18 months, and all had left or not been able to handle his work schedule, the last one leaving as he was posted to a new job overseas by his full time employer.

My full time job is as a part time CFO. Some for a day a month, some for two days a week, but always there for clients, and always flexible.

 

  1. How flexible are you ?  What if I have an emergency or need you for a longer term for a project ?

Whether you plan to hire the CFO for a day a month or two days a week, it’s clear that there are certain times in the life of an SME that they may be needed more or less. Ensure that the CFO is flexible and can support you during key stages of the business, whether that is growth spurts or a crisis situation. The nature of a CFO and many back office functions is transactional and, particularly in an SME, is often dependent on what is put in front of him. I find that after the first few months at a new client, once everything is understood clearly, any issues are fixed, and the client operations are running reasonably smoothly, time spent on the client can be reduced and any additional time time spent is dependent on issues, whether that is a large complicated contract to review for legal and cashflow implications or a new venture to look at.

At CFO Counsel, we plan to have around 70% utilization in part time CFO roles and 30% free for client projects, client development, pro bono work we like to do for start ups, or diving and learning to fly. Because we have free time scheduled, we are able to jump into new projects and spend adequate time on them without having to rush off on other jobs.  We do like to avoid a crisis when we can, however, and  prefer to work early with management in prevention rather than cure.

 

In summary, ensure the CFO you hire is for suitable you and your plans. They undoubtedly provide a needed service for SMEs, but make sure that they are fit for purpose and can be there when you need them.

Update  – refer to a recent  article regarding another 3 questions – in respect of hiring an SME CFO :
3 questions a CEO needs to ask before hiring a CFO
CFO Counsel

If you are interested in the support we can provide SMEs learn more at CFO Counsel Asia

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