A New Trend: Part-time CFO Service
Dr Ozgur Duymaz- 15 December 2020, Tuesday
Financial management is of vital importance in small and medium-sized enterprises, which are one of the cornerstones of the economy. Although many such businesses are profitable, they find it difficult to manage cash flow and may be exposed to a high debt spiral. In some cases, applying an early collection low-profit policy protects the company from having difficulty in repaying its debts. Finance professionals play a significant role in determining the point where an early collection policy should be applied.
Such organizations are often run by company owners. They sometimes focus on production and sales and neglect the financial side. If the competence of the financial personnel is weak, the company may face bankruptcy. On the other hand, there is no workload that requires the employment of a full-time CFO, and the cost of these people is found to be high by the company owners. At this point, is it possible to both strengthen financial management and achieve this at a reasonable cost?
As a new working trend, some accounting and auditing companies offer finance part-time CFO services. The person or organization that will provide the service first analyzes the operations and financial status of the company and determines how much working time will be needed for the part-time CFO service and the scope of the service. Working times are expected to be longer in the first months. At this point, the company expects the person who provides the service to have experience as a CFO in the past. Industry experience is also expected but not necessary. An experienced CFO who is able to think analytically can adapt very quickly to any sector. While providing the service, the benefit should also be measured and cost-benefit analysis should be made for the company receiving the service. In fact, a good CFO is assumed to work for free, because the benefit is expected to be higher than its cost.
For a company that cannot afford a full-time CFO's cost, taking a part-time CFO service seems like a good option to strengthen financial management. Thus, company owners will have the opportunity to focus more on sales and production and will have the opportunity to use reliable financial data in their strategic decisions. What is expected from a part-time CFO is not only to accurately report the past performance but also to shed light on the future by preparing projections according to various scenarios, to manage the company's cash flow, and to facilitate access to new funds.