Part Time CFO v Full Time CFO

4 April 2024

Part-Time CFO vs. Full-Time CFO: Which Is Right for Your Business?

Effective financial management is at the heart of every successful business. It’s a fact that’s especially true for organizations experiencing rapid growth.

While internal accounting and finance teams can manage financial operations in-house, it’s advantageous to leverage the expertise and leadership of a Chief Financial Officer (CFO). A CFO provides the executive experience needed to plan for upcoming financial changes, manage cash flow, boost profitability, and, ultimately, guide your business toward its strategic financial goals.

Of course, hiring a full-time CFO is a big decision — one that carries financial constraints, hiring challenges, and organizational roadblocks. Fortunately, you don’t have to jump into the deep end with a full-time hire.

A part-time CFO, also known as a fractional CFO an excellent option for many organizations. They provide the same financial expertise and leadership, just in a more part-time capacity.

Of course, there will be distinct differences in each hiring option. In this article, we’ll explore how businesses can best make a decision on which CFO role is right for their needs and uncover some actionable strategies to vet the right candidate.

The Role of the CFO: Key Responsibilities

Before we dive into the differences between a part-time and full-time CFO, let’s first explore what these financial professionals bring to a business. Here are some examples of key tasks often covered by a CFO:

  • Cash flow forecasting and management
  • Securing new debt financing
  • Managing due diligence processes
  • Preparing the CEO for board meetings
  • Preparing financial statements
  • Tax planning
  • Cap table maintenance
  • Metric/KPI selection and monitoring

This list is by no means exhaustive. CFOs should always customize their approach to the unique needs of a business. No business will have the same needs as another, and as such, a tailored approach to financial strategy is always necessary.

A part-time CFO is exactly that: part-time. They offer the same level of expertise and guidance, just in a capacity that fits the needs of each specific business. A part-time CFO’s goals will align with the goals of a full-time hire. That means they will increase operational efficiency, save money, and free up resources and time for other leadership roles and internal financial teams.

With the median compensation of a full-time CFO being around £200,000, part-time CFO services offer strategic financial guidance at a far more affordable price point.

Another key difference is that a part-time CFO will come ready with flexible strategies to meet dynamic challenges as they develop. From bookkeeping to accounting they provide comprehensive coverage of essential financial tasks, scaling services up and down as needed. It pays to utilise a part time CFO as the right partner can become a one-stop finance solution.

Part-Time CFO vs. Full-Time CFO

How can a business determine if a full-time or part-time CFO is the right fit for their needs? Let’s explore some of the factors that can help you decide on which route to explore:

  • Business Scale: the size of your company is a great starting point. A part-time CFO is a good choice for small to midsize businesses and high-growth start-ups where cost efficiency is the primary concern. For larger businesses with more complex financial operations, the attention of a full-time CFO is warranted.
  • Financial Needs: during periods of heightened financial activity, such as fundraising or M&A activity, a part-time CFO can provide guidance as needed. For steady-state operations, a full-time hire can be advantageous, depending on the scale of the business and its needs.
  • Level of Financial Maturity – a part-time CFO can provide excellent supplemental expertise for existing financial teams or offer comprehensive services for businesses without any financial teams on staff. On the other hand, businesses with comprehensive internal teams will likely benefit from an in-house leader.
  • Need for Industry-Specific Knowledge: part-time CFOs often come equipped with industry-specific knowledge. If you have specific needs in mind, especially in terms of industry expertise, a qualified CFO can make all the difference.

How to Choose a Part-Time CFO

The right part-time CFO covers more than just essential financial tasks; they’ll become a strategic advisor with a wealth of wisdom and guidance. But choosing the right CFO is easier said than done. Here are a few things to consider when selecting a part-time CFO:

  • Financial Services Needed: what are your exact financial needs? Do you require basic CFO responsibilities, or do you need CFO services alongside accounting? If so, be sure to find a firm that can cover both.
  • Industry Expertise: be sure to partner with a CFO provider who will have expertise in your specific industry. The needs of a manufacturing company will differ significantly from those of a SaaS business, so choose accordingly.
  • Analysis and Reporting: the right part-time CFO will deliver industry-specific reports, recommended KPI’S and establish metrics for intenal reporting.
  • Interview Insights: during the interview process, pay close attention to how the CFO firm asks questions. This will reveal how their business operates and, more importantly, how they approach each of their client’s unique needs.

It’s also important to bring in relevant team members and individuals whose opinions you trust after the initial interview is over.

Above all, avoid inexperienced candidates, those without specific industry understanding, or those with poor communication skills. This isn’t a simple hire; this is a mission-critical leadership role.

More Articles

What exactly is a Fractional CFO

What exactly is a fractional CFO? A fractional CFO is an experienced CFO consultant who provides services for organizations in a part-time, retainer, or contract arrangement. There are multiple benefits of a fractional CFO, and these offer a company the experience and...

The rise of the Fractional CFO

Top reasons a business will hire a Fractional CFO  You lack the skill set in their existing c-suite The person who currently oversees that function needs to focus elsewhere (Ex. a CEO who also manages the businesses finances) You have a specific project in mind that...

The Right Time to Hire a CFO

The Right Time To Hire A CFO: The Fractional Approach For Startups And Scaleups The success of a startup business often depends on the quality of financial decisions made at crucial points in a company’s development. As a founder or CEO, you might find yourself in the...