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The Freelance Finance Chief

As demand for executives and controllers grows more slowly over the next few years, CFOs may need to consider going “part-time.”

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.

Tom Coffey

Tom Coffey, partner at B2B CFO; freelance finance chief

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.’”

12 thoughts on “The Freelance Finance Chief

  1. As someone intending to transition from banker to part-time CFO, I am interested in the fee schedules successful such part-time CFOs propose. Is it hourly, monthly retainers or annual contract? Also, how does one determine what is a “fair” charge?

    Any insights would be most appreciated.

    • Jonathan,

      There are lots of “1-armed Johnnie’s” who label themselves as CFOs but are really doing accounting manager and controller-level work at cut rates ($45 – 90 per hour). For true CFO work that includes pricing strategy, cash flow management, capital formation, Board reporting, etc. such as our TechCXO CFOs — who have public accounting and public company CFO experience — the range is closer to $190-$250 per hour. There are some fluctuations depending on markets. If you go to TechCXO.com/independence there are more details.

  2. As with many professions, many outside of their own have different definitions of a CFO… And different levels of services provided… And different qualifications. … An ex-banker might be be able to raise funds but a CFO, but a CFO worth their salt will have a CPA, public accounting experience, preferably Big 4, and be able to provide the proper financial and operational discipline, system and process and strategic guidance to prepare for and steer growth. http://Www.yourowncfo.com

    • All great CFO’s are high level thinkers who make all the moving parts of the finance function (and people) work together to accomplish the long term vision of the company.

      Not all of them are CPA’s.

  3. To weigh in on this discussion, rates vary by market. In the Austin TX market, a qualified P/T CFO goes from $150-$175/hr if you are doing work for young tech companies. In the Boston, MA market, similar qualifications command upwards of $250/hr. I am told Silicon Valley rates are similar to Boston. These rates vary depending on qualifications, size of client, issues to be addressed, industry. In this business, breadth of experience is very important as well. It is good to be able to raise capital, but you should also be able to do a lot of other things ranging from budgeting to contract negotiation, understanding IP issues, and taking out the trash at night. As far as a Big 4 CPA, I do not have one and have been doing this successfully for about 15 years. I do however have a very presentable MBA and excellent experience that only time will give you. And, yes, we always live in fear that the pipeline will dry up – my advice if you want to do this – 1) treat it as a business, not a job 2) expect to work 50 hrs/wk of which 30 is billable 3) do some biz development every single day and 4) keep up on CPE’s even if you are not a CPA.

  4. Fantastic article! Our experience with compensation varies by market and is commensurate with experience, availability, and utilisation, the range for “True” part-time CFO work can range from $1,000 to $2,500 per day.

    If you are interested in pursuing a “Freestyle” career, The CFO Center is currently seeking high-caliber part-time CFOs to work with a portfolio of mid-tier private, public, charitable, and not-for-profit businesses across multiple industries in the Boston area. If you are a qualified professional accountant (CPA, CA, CMA), and have been a frontline CFO, we want to hear from you. bill.starr@cfocenterllc.com (http://www.cfocenterllc.com)

  5. Hi Amy,
    A good article, I am currently considering this move myself, but in the UK, any help would be appreciated for the UK market?

  6. Great article. I have been doing contract-CFO work in both SF and now NY at rates from $150-200/hour. There seems to be a lot of startups that neglect to staff FT hires in the finance area early on, so there are now multiple firms targeting this area. I just relocated to NY and have found VCs are a great lead-gen target for PT gigs. I agree that you need to focus on BD at least one day a week.

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