What exactly does a part-time CFO do? Are there any benefits to being a freelance finance chief? CFO spoke with several part-time CFOs, who share their insights below.
A Valuable Skillset
To start, the term “part-time CFO” is a misnomer; most part-time finance chiefs work at least 40 hours a week. A part-time CFO is distinguished by working for a number of different companies at once.
At most companies, part-time CFOs are not glorified accountants or controllers; rather, they bring sophistication to firms that are “too early-stage to afford a CFO on a full-time basis,” says Lori Reiner, partner at EisnerAmper. They are particularly well-suited to growth companies that want to raise funds or go public, Reiner says. “Without the professionalism that a part time CFO would bring to the [fundraising] process, a smaller, emerging company would never get financing,” Reiner says. A part-time CFO can play a similar role at a company that has financing but needs someone to report to the board of directors periodically, Reiner says.
Many companies looking for financing already have a controller, but “often that person isn’t qualified to take on the responsibilities of a CFO,” says Tom Coffey, a part-time finance chief who has provided C-level services to companies with $5 million to $100 million in revenue for eight years. “[Controllers] do the accounting and they’re preparing the financial statements and the debits and the credits, but they’re not working on strategic initiatives.”
Coffey says he find many of his clients through accounting firms, attorneys, and investment bankers he has worked with before. Investment bankers, for instance, have brought him into companies they are preparing to sell. “They recognize that the finance person within the company is not the person they want sitting at the table trying to describe the link between the company’s strategic objectives and the operational aspects and the financials, because they can’t do it,” he says. “Sometimes they need a higher level person in there to help stabilize the financials and make sure the data is consistent and ready for due diligence.”
Sometimes part-time finance chiefs take on higher-level responsibilities later on. At Clayman’s longest standing client, she spends most of her time on analytics, including model building and return-on-investment analysis. “Because it’s my first client and I’m still with them 13 years later, the relationship continues to evolve and change,” she says. “In the beginning, I was shepherding the budgeting and planning. But because the company has grown more successful, we actually have strong internal finance folks, so my involvement is on much a higher level.”
Freedom to Be Candid
Along with providing flexibility, part-time work allows CFOs to be more honest with their coworkers (and the CEO) than they typically could. “I can tell somebody something they don’t want to hear and if they get really mad at me, it’s OK,” Clayman says. “I have a little bit more independence, because I’m not beholden to one client. That helps me tell people the things they don’t want to hear, like ‘you’re spending too much money.’”