Top Reasons Not to Hire a Full-Time CFO

Written by Brinker Simpson & Company | 10/26/22 4:49 PM

At the forefront of every important financial decision regarding a company is its CFO. They are often credited as the economic backbone of their organization, overseeing complex financial operations, systems analysis, operational optimizations, and providing financial strategies and decision-making. However, an interesting trend is beginning to take place in the marketplace where CFOs are concerned.

In today’s market, businesses have ample choice when filling roles. With the move of data and systems to the cloud over the last several years, many small businesses, in particular, have begun to depend more on remote 3rd-parties for traditionally performed in-house activities. As a result, it is now possible to get expert financial insight from professionals with experience in your particular industry without requiring them to move to your location. This industry change opens a world of possibilities to find the best CFO for your specific needs. As such, more and more industry-leading organizations are finding themselves in a situation where it is suitable for them to bring on an outsourced CFO instead of a full-time, in-house hire.

Reasons to Outsource

There are many reasons an organization may pursue an outsourced CFO instead of a full-time CFO. While challenges may arise within an organization that necessitates this move, the reasons for choosing to pursue an outsourced CFO vary from organization to organization. Reasons an organization may decide to pursue an outsourced CFO include:

To resolve a challenge facing the organization

. Problems such as cash flow, tight margins, or operational inefficiency could all hinder a company’s productivity. An outsourced CFO may allow an organization its best opportunity to solve these challenges and come with the expertise needed to bring about necessary change.

Allows an organization to maximize margins

. In this instance, after analyzing current costs and pricing structures, an organization may choose to employ a fractional CFO. Fractional CFOs typically have extensive previous CFO-level experience and lend their financial expertise to organizations on a contractual basis. They may be hired and tasked with an assortment of duties, including budgeting, fundraising, analyzing the health of a company, and projecting growth based on the organization’s long-term goals.

There is a need for only an interim CFO

. Any number of situations could arise where a temporary replacement is the most viable option for this vital role. A CFO may be on temporary or extended leave, or the organization, while seeking a permanent replacement, may need to fill the position on an interim basis between hires.

To partner with an existing CFO

. The need may arise where an outsourced CFO is brought on to consult with an existing CFO and provide necessary experience about a particular challenge the organization may face, providing critical knowledge that the current CFO may not have. Additionally, there may be a specific goal the organization has in sight to achieve. This strategy is often seen as a way to elevate the overall performance of a financial team while transferring valuable skills.

The organization is preparing for growth. Securing an outsourced CFO with specific market experience can help an organization make strategic moves that better position them to achieve its long-term goals. They have likely solved challenges like yours before and have experience knowing how to most effectively design and implement new or improved systems that may be needed to handle growth and added complexity.

Whatever the reasons behind an organization’s choice to pursue an outsourced CFO instead of a full-time hire, the move can have lasting effects. Outsourced CFO’s come with experience best utilized for implementing tangible changes while providing the same high-level financial strategies that a company anticipates. As such, they are a viable option for many organizations looking to make a change.

Making the proper selection of a CFO is a crucial step in the overall success of your business. Before making a move, make sure you’re looking at it from all angles. Talk to our team for guidance on whether or not an outsourced CFO is the right move for your business.

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