What support does my business need?
Part-time CFO
A part-time CFO (chief financial officer) gives a business senior finance leadership for some days a month, with a focus on strategy, funding and investors.
The short answer
A part-time or fractional CFO works with your business for a set number of days a month on strategy, funding, investors and finance planning. In UK small and medium businesses, the titles part-time CFO and part-time finance director are used loosely and overlap. Judge the person by what they will do for you, not by the title. Some businesses that think they need a CFO may be well served by a part-time finance director or better monthly figures.
CFO or finance director: what is in a title?
We have not found a professional body or official definition that separates a CFO from a finance director. Firms and individuals choose the title they prefer. Where firms do draw a line, it may look like this:
| Part-time finance director | Part-time CFO | |
|---|---|---|
| Weight of the work | Running finance well: forecasts, budgets, reporting, controls, lenders | Strategy and capital: raising money, investors, buying or selling businesses |
This is how the titles are used in practice, not a rule. Some part-time finance directors raise money and deal with investors, and some part-time CFOs spend their days on budgets and reporting. See Part-time finance director and Finance director or CFO?
What a part-time CFO may do
- Build the financial plan behind the business strategy.
- Prepare the business to raise money, and deal with investors or lenders.
- Report to the board or investors each month or quarter.
- Plan for buying another business or getting ready to sell.
- Make sure the finance team, controls and reporting can cope with growth.
Who it may suit
- Businesses planning to raise investment, or with investors who expect board reporting.
- Businesses preparing for a sale, a merger or buying a competitor.
- Fast-growing businesses whose plans depend on getting the funding right.
Qualifications
We have not found a qualification that is required to use the title CFO. Some part-time CFOs hold a professional accountancy qualification; some come from banking, investment or general management. Ask what they hold and what deals or funding rounds they have worked on.
What it costs
We have not found a reliable published source for what part-time CFOs charge in the UK, so we do not give a figure. The cost depends on the number of days a month and the work involved. Ask for a day rate and an estimate of days, in writing, before you agree anything.
Questions to ask before you hire one
- What will you do in the first three months, and what will we have at the end of it?
- How many days a month do you think we need, and why?
- Have you raised money, or worked on a sale, for a business of our size?
- Do you hold a professional accountancy qualification?
- Who will do the day-to-day finance work, and how will you work with our accountant?
When a smaller step may be enough
If you are not raising money, dealing with investors or planning a sale, a part-time finance director, a management accountant or better monthly figures from your accountant may give you what you need. The title CFO doesn't by itself mean a higher level of help.