The U.S. Bureau of Labor Statistics (BLS) reports that over 900,000 finance job openings are posted by businesses every year. This indicates the ever-growing demand for finance professionals across various industries. One of the most sought-after positions in the finance sector is that of a CFO.
A CFO is a senior executive who manages various financial actions for a company while also ensuring that the company’s financial reports are complete and accurate. Anyone with sufficient experience and expertise can be a CFO, but a Long Island CPA can make an ideal choice for the role.
Understanding the roles and advantages
Depending on various variables, a business may choose to hire either a full-time or a part-time CFO. While their roles and responsibilities are very similar, they are not entirely alike.
Full-time CFO
A full-time CFO is a senior executive of the company who manages financial planning and cash flow monitoring and assesses the company’s financial strengths and shortcomings while also finding out ways to fix them.
In short, a CFO presides over all the financial operations of an organization while also managing activities related to day-to-day economic decision-making, like investment strategies, befitting, tax planning, contract negotiation, audits, etc.
Following are some benefits of hiring a full-time CFO for your company.
- A full-time CFO can have an in-depth understanding of a company’s finances. Therefore, a full-time CFO can make informed decisions, keeping in mind the company’s financial health, and implement a strategy to efficiently utilize financial resources.
- A full-time CFO can develop a financial strategy that perfectly aligns with the company’s long-term goals. Nonetheless, a full-time CFO is always available to tweak the strategies to meet the financial objectives by identifying growth opportunities. This means that a full-time CFO can provide continuous leadership for the company’s financial strategies.
- A full-time CFO has a better understanding of the business model and industry trends, which allows them to drive growth. Moreover, they have strong and trusting relationships with the stakeholders, which facilitates better communication and cooperation and, thus, a long-term commitment to the company’s growth.
- A full-time CFO is directly involved in the operations of the company, which is why a full-time CFO offers improved cross-functional collaboration and strong relationships with other departments.
- A full-time CFO promotes a culture of financial accountability and responsibility, which can help increase organizational transparency and keep investors and stakeholders informed about financial performance.
- A full-time CFO can easily identify the areas in a company that may be causing financial losses. Therefore, they can aid in the development and training programs for the skill development of the employees.
Part-time CFO
A part-time CFO is very similar to a full-time CFO, except that a part-time CFO works on an interim, part-time, or project basis. A part-time CFO is perfectly suitable for small businesses and start-ups that have limited financial resources and cannot afford to hire a full-time CFO.
A part-time CFO oversees accounting, financial planning, financial reporting, risk management, and more. The following are some key benefits of hiring a part-time CFO.
- Part-time CFO offers excellent flexibility. They can provide their services to a company as and when required, which allows businesses to scale with financial expertise at their disposal while also saving unnecessary expenses.
- An experienced part-time CFO brings a wealth of knowledge and experience to your business at a considerably lower price than hiring a full-time CFO. It allows you to save money, which you can invest in other valuable resources.
- Part-time CFOs have experience working with different companies, which ensures a broad spectrum of knowledge. Therefore, hiring a part-time CFO ensures success and growth for your business.
- A part-time CFO knows how different financial systems and processes work. Therefore, they can quickly develop clear and effective financial policies and easily monitor cash flow, which naturally improves financial performance.
- Despite not being available all the time, a part-time CFO can help businesses meet their financial goals through strategic planning. It includes important financial tasks that work in the long run, like forecasting, budgeting, capital planning, etc.
Who is suitable for your business
It may be confusing for a business owner to understand whether to hire a full-time or a part-time CFO, as they both offer different benefits. Therefore, you should consider the following deciding factors to decide who is more suitable for your business.
- Cost: A part-time CFO is more cost-effective as you pay them only when the services are needed, which can reduce overhead and salary costs.
- Scope of work: A full-time CFO is more suited for comprehensive financial leadership, while a part-time CFO is a better choice for small companies.
- Growth Stage of Company: Early-stage companies can save money by hiring a part-time CFO, while a bigger and older company can avoid unnecessary expenses and financial complications by hiring a full-time CFO.
- In addition to the above, the type of industry and your business model are also major deciding factors when it comes to hiring a CFO.