What is an interim CFO and does your business need one?
In today's fast-paced and ever-changing business landscape, companies are constantly looking for ways to adapt and stay ahead of the competition - and often this means having reliable, experienced finance guidance within your business to help you take the right next step.
The popularity of interim CFOs has been on the rise in recent years, as companies have recognised the benefits of having an experienced financial leader in place - whether during transition after a business exit, or to help with specific projects such as crisis management or cash flow challenges.
Keep reading to find out everything you need to know about the role of the interim CFO and how they could benefit your business.
What can an interim CFO do?
An interim CFO is a seasoned financial professional who is hired on a temporary basis to help companies navigate through periods of change. This can include times of rapid growth, mergers and acquisitions, restructuring, or when a CFO departs suddenly.
Interim CFOs bring a wealth of experience and knowledge to the table, and can provide valuable insights and recommendations to help the company achieve its financial goals.
They offer temporary financial leadership
An interim CFO can provide temporary financial leadership to organisations. They can step in and take over the financial management of a company, ensuring that all financial processes are running smoothly and efficiently. This can be particularly useful for small businesses or startups, which may not have the financial resources or expertise to hire a permanent CFO.
An interim CFO can help during a crisis
Interim CFOs are also instrumental in handling financial crises and guiding companies through turnarounds. They can help identify the root causes of financial problems and develop strategies to address them. In addition to crisis management, they can help businesses navigate other challenges, such as mergers and acquisitions, restructuring, and regulatory compliance - all at a shorter notice.
A temporary FD can provide strategic financial planning
Interim CFOs play a critical role in developing and implementing strategic financial plans on a project basis. This includes forecasting, budgeting, and financial analysis, as well as identifying opportunities for growth and expansion. By working closely with other members of the executive team, an interim CFO can help ensure that the company's financial plans align with its broader strategic goals.
Ultimately, this means you can then look to take on board a different finance professional, such as a Finance Controller, to implement the plan that your interim CFO has put in place.
They can guide you through transitionary periods
Thinking of exiting your business? When a company experiences an exit, transition or merger, they may hire an interim CFO to help navigate the financial complexities of the situation. Interim CFOs can provide a smooth transition of leadership by ensuring financial stability during the change, as well as helping with creating your exit plan in the leadup to the transition.
Interim CFOs can help roll out specific projects
Additionally, companies may hire interim CFOs for special projects or system implementations. These projects might require specific financial expertise that is not currently in-house. By bringing in an interim CFO for these projects, companies can ensure that the project is completed on time and on budget.
What are the benefits of hiring an interim CFO?
You’ll see an immediate impact
An interim CFO can make an immediate positive impact on a company's financial performance by bringing in their expertise and experience. They can analyse the financial data and identify problem areas that may have been overlooked. Once these areas are identified, they can implement solutions to increase revenue or reduce expenses. The interim CFO can also develop financial strategies that align with the company's goals and objectives.
Interim CFOs offer an objective perspective
Having an objective perspective from an external interim CFO is an advantage as they can provide unbiased recommendations that may not have been considered by internal teams due to their familiarity with the company. The interim CFO can analyse the company's financial situation and provide insights into what is working and what is not. This perspective can help the company to make better decisions and avoid potential mistakes.
They can offer training to the rest of your team
Interim CFOs can transfer knowledge and best practices to internal teams, which can improve the company's financial operations in the long term. They can train and mentor the staff on financial management, financial reporting, and analysis. The interim CFO can also help to establish best practices and processes that can be used even after their departure. This knowledge transfer can help to strengthen the company's financial capabilities and improve its overall financial performance.
Interim CFOs are a cost-effective solution
Finally, hiring an interim CFO can be a cost-effective solution compared to hiring a full-time executive. interim CFOs are typically hired for a specific period of time, and their compensation can be structured to reflect the length and scope of the engagement. This can result in significant cost savings for companies compared to hiring a permanent CFO.
Hiring an interim CFO with The Finance People
In conclusion, an interim CFO can provide temporary financial leadership to businesses during transition periods, supporting with any strategic financial challenges, such as exit planning, crisis management, cash flow management, profitability, management information and more. This is an effective way of obtaining the necessary expertise and guidance without incurring the costs associated with a permanent hire.
An interim CFO can help businesses navigate difficult financial situations, provide strategic planning and analysis, and bring in fresh perspectives to help businesses achieve their goals. By hiring an interim CFO, businesses can ensure continuity and stability during times of change and uncertainty, which can ultimately lead to long-term success and profitability.
The Finance People are on hand to help you find the perfect-match interim CFO for your business. Get in touch today to find out more about our services and to start discussing your business requirements.