The days when small and midsize businesses needed a full-time, on-site chief financial officer have gone by the wayside. The trouble is that many leaders of these businesses haven’t gotten the memo. They assume that even though CFOs come at a steep cost — the average American CFO pockets $361,258 annually — a company can’t grow without a C-suite-level pro at the helm.
Not only are they mistaken, but they're also putting their businesses at risk by not considering less expensive alternatives to a full-time CFO with all the benefits.
To be sure, almost every company should have a CFO presence on the team. Creative CEOs without financial acumen need someone with experience and expertise to guide them when it comes to cash flow management, fundraising, key performance indicators, and related financial metrics. Even CEOs with a background in finance who have less trouble navigating the waters deserve the advantages that come with having a CFO’s insights.
However, the main stumbling block to embracing the idea of an "occasional" CFO is one of misconception. Company founders assume that finding a part-time interim or fractional CFO is akin to snagging the proverbial needle from a haystack. Not only is that belief outdated, but it also flies in the face of everything we know about modern working life and remote working arrangements.
With the tools and technologies available, corporate entities can easily get the advantages of a dedicated CFO without worrying about additional office space or tremendous payroll expenses.
The Shift to Remote Finance Work
The online realm has changed every facet of working life, CFO jobs included. Now, vendor relationships often begin and continue virtually. A generation ago, it would have been odd to build trust with colleagues without ever seeing them face to face, but people are now more at ease hiring from afar. Consequently, more organizations are facilitating communication with video conferencing and chat apps.
It’s a good and smart start, especially for companies in need of a CFO. Businesses are no longer restricted to a pool of CFO candidates within driving distance of the office, and opting for a remote CFO gives companies access to a more talented pool of candidates, improving the chances of finding the perfect fit for a particular business and industry.
Finance is based on solid working relationships, so feeling comfortable with any CFO, remote or otherwise, is essential. And with more than a third of the American workforce in full freelance mode, it’s plain to see that companies mustn't let geography keep them from the opportunity to work with a CFO with the right skill set and personality fit.
Finance fueled by big data and technology isn't going anywhere. It's steadily humming along because corporations value efficiency more than they value what worked in 1990 or even 2000. Ten years ago, the rise of Xero, Intacct and QuickBooks Online led to today’s cloud-based accounting that’s accessible from any device. Today, nearly 50 percent of all midsize and smaller companies keep their financials in the cloud and not on a desktop. Essentially, this makes it easy for a CFO to step in and tackle projects — even if that person is never actually on-site.
Embracing the Notion of a Remote CFO
Waffling on whether or not you should add a full-time CFO to your payroll? Consider implementing modern tools, strategies and behaviors that will give you the option of contracting a remote CFO instead of paying a premium for financial duties.
1. Uncover the newest interaction tech platforms, and learn how to use them.
Millennials love their online platforms, and you should, too. According to research, 68 percent of younger workers text "a lot," 88 percent connect via social media, and nearly half use instant messaging platforms. What does this mean for your organization? Basically, you owe it to your team to embrace the most effective apps and tools. Educate yourself so you can create and maintain constant rapport with team members; then, when you bring on a virtual part-time CFO, touching base will be second nature.
2. Scrap any finance or accounting functions not in the cloud.
Are 25 percent or more of your financials still on paper? Break the habit, because cloud computing is expanding astronomically in importance. By 2020, companies and individuals will spend more than $162 billion on cloud computing. Why? It makes business simpler to conduct near and far. A remote CFO can’t help you if they're not able to do 100 percent of the job remotely. Invest in a provider you trust by conducting due diligence and getting all your information onto a cloud-based platform.
3. Use videoconferencing for all meetings.
Videoconferencing has become so second nature to our company that it’s not at all unusual to conduct everything from job interviews to vendor negotiations via a screen. Worried video might detract from your mission? Studies show that 94 percent of videoconferencing users believe it provides an efficiency boost.
4. Choose a messaging tool for speedy back-and-forth communications.
Have you spent any time on Slack? If so, you won’t be surprised to hear that 9 million people use it each week. They appreciate being able to avoid cumbersome emailing and get answers fast. At our company, Slack provides us with a way to converse with anyone in seconds. Psychologically, email can seem like a tortuous to-do list item; Slack just feels like you’re responding to someone who's standing beside you.
Freelancing has finally hit the C-suite, and you owe it to your business to explore all the possibilities it presents. Hiring a remote CFO shouldn’t be viewed as a leap of faith; instead, see it as a leap forward into the future of working effectively, remaining within your budget constraints, and staying miles ahead of the competition.