The pandemic has made the last year extremely challenging for companies. CEOs, CFOs, investors, and shareholders have had to deal with a great level of uncertainty as well as a decrease in sales. Moreover, in every company there comes a time when change is required. Companies may want to reevaluate their financial plan to get to the next stage of growth. This is where we welcome the interim CFO, or in other terms, the prototype of a modern-day CFO.

How to find the right CFO for your company – Fractional vs Interim

A CFO is undoubtedly one of the most valuable assets of a company as they are the financial experts who oversee key components of a company’s operations. If you run a start-up or a pre-revenue company, hiring a full time CFO can be costly and may not be necessary since the company is still in early stages of growth. However, some kind of financial expertise is beneficial as it can steer your business in the right direction and implement strategies for growth. If you manage an intermediate company, chances are you already have a CFO in place. However, what do you do if your company is going through a financial crunch and your current CFO does not possess the necessary skills? Or if your CFO resigns abruptly in the middle of a financial downfall?

In either case, your company needs a part-time CFO. The question is, do you need a fractional or interim CFO? Let’s understand the difference.

Fractional CFOs provide financial services to a company; however, they work part-time. This means that they will most likely work for your company a few days a week and simultaneously they work and provide the same services to other companies. Interim CFOs as the name suggests, are financial experts who essentially fill in the temporary role of a full-time CFO. They are usually employed by a company to work on a specific project using their expertise and skills and leave once their work is complete. Interim CFOs are also hired to help companies during a financial crisis, or they temporarily fill in the role of a permanent CFO when the company is in the process of hiring a new one.

Which one to go for?

Before hiring a CFO whether fractional or interim, it is important to understand the distinction. Sometimes companies think that they need to hire an interim CFO when they really need a fractional CFO (or vice versa). Sometimes, companies may not need a CFO at all, they may instead require an accountant or lawyer to review a financial agreement. Depending on your company’s needs either a full-time interim CFO or fractional CFO may be favorable. Post-covid has also resulted in great ambiguity which means that hiring an experienced CFO that is able to make bold decisions in a timely manner reduces risk and increases potential during this crucial time period. If your company requires immediate assistance or is undergoing a transformation, then I advise you to hire an interim CFO. In other terms, a full time CFO with a short-term contract.

What skills must a modern-day CFO possess?

Since an interim CFO is only recruited for a short amount of time, they must familiarize themselves before joining the team. The first 30-40 days are critical to implement a long-term strategy that works for the company, there is no settling-in phase and preparation is key. A few ways a CFO can prepare before they start is by establishing close relations with the finance team, creating a clear plan for the project and setting a realistic timeframe.

Having over 20 years of experience in corporate finance and my current role as Chief Financial Officer of Seajet Systems has shown me that one of the most important skills for a modern-day CFO is strategizing. This means that the CFO must be prepared to evaluate opportunities and have the answers to questions such as ‘How do we deal with the next pandemic?’ or ‘How do we sell our product?’ The past year has been challenging for companies due to the pandemic, nevertheless it has taught us that diversification is necessary. The pandemic as well as advancements in technology have transformed the CFOs role well beyond their traditional role of risk management and all things financial. The CFO must be prepared to provide an independent perspective, be an effective business partner and create the workforce of the future. Nowadays businesses are looking for CFOs who do more than just handle money.

The right CFO must be able to drive digital transformation and I believe that tech plays as much of a role as financial ability. Companies have begun to embrace a new focus and the pandemic has changed the way businesses operate. The focus of the 21st century is on innovation and technology. Companies now must work towards becoming agile and the CFO is essential towards driving change. In my experience, the right CFO should apply cloud technology as it can assist growth and reduce overhead costs for a business. By aligning finance and technology, CFOs have the ability to maximize their value to the business.

In conclusion

The current climate has diversified the traditional CFOs roles and responsibilities. A modern day CFO must work together with other C-level executives to bring the best out of their company and I can only predict that there will continue to be a further blending of roles. This is what gives rise to the interim CFO. Possessing the right skills and being able to adapt and be agile is what companies in the 21st century require in order to survive. Additionally, hiring an interim CFO ensures that everyone in the office is able to focus on their own tasks. As the CEO of your company, you are able to breathe a sigh of relief and have the confidence that your financial tasks are being handled with care and expertise. One last piece of advice I would like to mention is that one of the biggest advantages of hiring an interim CFO is that it provides your company with a fresh perspective and maybe that is exactly what your business needs in order to get out of a financial slump. Your interim CFO will be able to use their past experiences to restructure your company’s financial plan and steer it towards growth - take advantage of that.