If your business isn’t growing as fast as you’d like, or if you’re overwhelmed with bookkeeping and accounting chores, you may be thinking about hiring a controller or CFO. But there are various types of finance professionals and the differences between them can be confusing. What is a part-time CFO, interim CFO, fractional CFO and part-time controller, and what services do they provide?
In this article, we explain what each of these finance experts do and how to decide what you need for your organization.
What is a Part-Time Controller?
A controller is responsible for a company’s accounting activities. This can include designing and implementing accounting processes, supervising accountants and bookkeepers, and ensuring compliance with regulations and policies. For most small businesses they also oversee financial reporting and handle payroll processes. In a larger organization that has a full finance department, the controller will report to the chief financial officer (CFO). The title part-time controller indicates that the individual is hired as a contractor from an outside firm and is not a full-time company employee. They typically bill by the hour for their services.
You might need a part-time controller if:
- You are the owner of a small business and have been doing all your bookkeeping, accounting and financial planning yourself, which takes you away from your main business.
- Your small or medium-sized business has a bookkeeper who handles basic tasks, and you would like to have someone oversee their activities to ensure best practices, accuracy and adherence to government regulations.
- You believe your company can benefit from higher-level analysis of financial data so you can make more informed business decisions.
What Does a Part-Time CFO Do?
The CFO is a strategic team member who advises the CEO on financial strategy, develops a capital plan, and helps manage investor relations. Some small business CFOs will overlap their duties with that of a controller. However, a CFO’s expertise is to assess the company’s financial risks, be on the lookout for opportunities and manage staff in the financial department. In addition, they help business owners to set and keep track of financial goals (KPI’s) and company budgets. A part-time CFO is someone with years of experience as a full-time finance executive, who now works with small and mid-sized companies, usually at an hourly rate, to help them be more profitable.
You might need the part-time services of a CFO if:
- Your business is growing and you want an expert to measure risk and guide your plans.
- You wish to raise cash for growth and plan to pitch investors or lenders. CFOs can provide compelling projections and nurture relationships with lenders, investors and important partners.
- You need someone to oversee your financial team and ensure that you’re making the right business decisions, but a full-time executive is outside your budget.
- Your company is headed in a new direction with both risk and reward, so you need data-driven analysis to make the best choices.
What Does an Interim CFO Do?
Unlike a part-time CFO, which provides ongoing part-time financial services, an interim CFO is a highly experienced finance professional who joins a company full time, but just for a short period. It’s often for 1-3 months but can be as long as six months to a year.
You might need an interim CFO if:
- Your company needs assistance during a financial crisis. An interim CFO can help you weather the storm and make smart decisions based on solid financial data.
- Your business is going through a change in operations or is being purchased by another company. A CFO will have the necessary expertise to navigate a complex financial situation and ensure that everything is done correctly.
- Your CFO has left the company and you’re in the process of replacing them. Having an interim CFO will help to make the transition smoother, especially if it takes a while to find a suitable candidate.
What is a Fractional CFO and How Much Does One Cost?
A fractional CFO is another name for a part-time CFO. It may be that you only require the services of a CFO for a few hours every week. For a start-up or small business, they can provide a variety of high-level financial services, from setting up an accounting system and tracking your company’s financial activity, to helping you build a strategy to grow your business.
As your organization expands, a fractional CFO can:
- Handle all bookkeeping and accounting duties
- Build cash-flow models and balance payables/receivables
- Perform financial forecasting
- Advise you about capital market opportunities
- Strategically plan how to reinvest profits for continued growth
- Maintain relationships with investors, banks and lenders
- Work with CPAs for tax filings
- Help you develop new systems and train staff
- Show company executives how to interpret financial data and make smart business decisions
How much does it cost for a CFO on a part-time basis? This will depend on your business needs. Generally, a fractional CFO costs $1,000 to $10,000 per month, whereas a full-time CFO will cost your company an average of $177,300 annually (including bonuses.)
CFOshare is Your Trusted Finance and Accounting Team
Businesses need all these roles, not just one. That’s why CFOshare offers a complete team to help your small business: from CFO’s to controllers to bookkeepers. Be confident that your company’s financial strategy is ahead of the curve in today’s business climate. We help our clients take their businesses to the next level, with expert financial services at a flexible hourly rate. Contact us for a free consultation.