Search
Close this search box.
Search
Close this search box.

When Should You Outsource The Finance Function?

© AdobeStock
Three questions to help you determine whether a fractional CFO makes sense for your company.

Many companies could benefit from the expertise of an experienced financial leader. However, hiring a full-time CFO isn’t always the most practical move to meet functional, budgetary or other needs.

Fractional CFOs, who work contractually as needed, can be a great option. Hiring such an outsourced CFO can make sense for any organization where the CFO function has fallen by the wayside, the controller has absorbed CFO-related responsibilities, the company has expanded and requires new skill sets, or the current CFO is departing and the company needs to reevaluate its needs.

To determine whether a fractional CFO is right for your organization, consider the following questions:

1. How much time do you need from a CFO?

Determine how much time you actually need from a CFO to get the insights you seek. If you could get what you need in fewer than 40 hours a week, 52 weeks a year, a fractional CFO could be an excellent choice to help you both gain valuable, new perspectives and save on payroll. In fact, research shows that hiring a fractional, rather than a full-time, CFO could result in savings up to 65%. This can also be a great approach for companies expecting to add a full-time CFO role in the future. A fractional CFO can stand in as a good interim measure before your company is ready to hire for a full-time position.

2. Is your business in a time of transition?

The unique perspective a fractional CFO can bring to the table may be particularly beneficial for companies looking to fill the roles of departing CFOs who have been in their positions for many years. The retirement or other departure of a full-time CFO can be an excellent opportunity to reevaluate the needs of your company and the nature of the position.

For example, a client recently engaged my company to take a fractional role upon the retirement of their longtime CFO. The intention, in that case, was to use that time to redesign the position before making a permanent hire. The company considered what the position had been providing for the organization, whether more was needed, whether some responsibilities could be shifted, and whether new responsibilities could be added. The retiring CFO remained available on an as-needed basis to offer institutional knowledge throughout the process. With the former CFO’s assistance, we were able to shift responsibilities smoothly and help the organization make room for personnel changes.

3. Do you have a specific, project-based need?

A fractional CFO may also be vital in filling specific short-term needs. A company may have a capable CFO who may be lacking in availability or expertise for a specific need. For example, a company may wish to assess or execute a significant business acquisition but lack experience in the type of purchase or industry being considered. Or a company may be planning significantly different operations or service lines (such as replacing functions that are currently outsourced) but not have experience with similar assessments.

Planning for expected (or unexpected) periods of rapid growth, optimization of financial planning strategies, expansion into new overseas markets, or several other critical situations may call for fractional help. For project-based needs, “CFO” may describe the level of expertise needed but not necessarily be an official title.

CEOs who recognize business needs only a CFO can fill should first realize they have options. Full-time hiring isn’t the only course of action. Before making the call, however, consider each question above to make the most effective decision for your company.


MORE LIKE THIS

  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events

    Roundtable

    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)

     

    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.