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Pros and cons of being an interim cfo
- By Terry Mickelson
- Published 02/10/2010
- Accounting
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Pros and cons of being an interim cfo
An Interim CFO is an individual who works for a company acting in the capacity of a chief financial officer for a short specific period of time. Three typical reasons lead to hiring of the interim CFO. First when the company needs someone immediately to take the place of an existing c-level executive, who is sick or has left the company. Second, when the company needs a financial accountant for a specific period of time for example until the company is sold. Lastly, when the company needs to manage a specific project that deals with accounting for example an assignment that requires implementation of a new accounting software package or to negotiate bank financing. This assignment can be for a period of 3-12 months.
The overall aim is to find an interim CFO with the desired qualification and expertise, which can start working as soon as possible. Sometimes the reasons for hiring an interim may vary according to certain situations. Some companies may not have a permanent job for a senior level executive and may not wish to pay them salaries that might be too heavy on the company's budget which also includes fees for finding an executive, sign-on bonuses or exit packages. Others may include, situations where the companies may be facing troubled times and it is financially unstable which would make it tough to get a CFO on board on a permanent basis. Sometimes large companies hire interim CFOs for their sub-divisions.
The work of an Interim CFO performs, is in accordance with the duties of the regular CFO. Their work generally follows the financial control modules of The Profit System. Most interim CFOs claim to enjoy their job on account of the constant challenge and adventure of shifting from assignment to assignment as well as the active participation on the process improvement procedures. Unlike full time CFOs they do not need to face personnel and operational issues on a regular basis. They are solely focused on their specific jobs that as a result, add value to their performance and keep them engaged. Being an interim CFO is a major bonus for those who are on the verge of retirement or has already retired and hence do not really need a permanent job at the same time do not want to spend all their time being idle. Pay scales for the interim CFOs ranges over wide scale. Interims with a lot of experience may earn anywhere around $1000 per day but on a large scale they might end up earning less annually on account of the temporary nature of their job.
Working as an interim CFOs are also associated with a considerable number of drawbacks. Their fees do not include bonuses and timely pay increases. They do not enjoy benefits like health and disability insurance and pension facilities. There are no stock options or incentive compensations provided to them. They have no assurance at the end of one assignment as to where or within what time period the next assignment comes their way. They do not really experience the occasional praises from the boss that the traditional employee receives due to their short stay. To make themselves visible in the market they have to sign themselves up with placement agencies.
These are the pros and cons of being an Interim CFO, but when seen on the brighter side of things the pros out weigh the cons in just a simple fact that in today's world there is a lot of uncertainty with working individuals in sticking with the company for even a few years. Gone are the days when people used to work for 30 years in a stretch in a single company. So an Interim CFO finds himself in a better position, on any given day, as compared to full time professionals.
The overall aim is to find an interim CFO with the desired qualification and expertise, which can start working as soon as possible. Sometimes the reasons for hiring an interim may vary according to certain situations. Some companies may not have a permanent job for a senior level executive and may not wish to pay them salaries that might be too heavy on the company's budget which also includes fees for finding an executive, sign-on bonuses or exit packages. Others may include, situations where the companies may be facing troubled times and it is financially unstable which would make it tough to get a CFO on board on a permanent basis. Sometimes large companies hire interim CFOs for their sub-divisions.
The work of an Interim CFO performs, is in accordance with the duties of the regular CFO. Their work generally follows the financial control modules of The Profit System. Most interim CFOs claim to enjoy their job on account of the constant challenge and adventure of shifting from assignment to assignment as well as the active participation on the process improvement procedures. Unlike full time CFOs they do not need to face personnel and operational issues on a regular basis. They are solely focused on their specific jobs that as a result, add value to their performance and keep them engaged. Being an interim CFO is a major bonus for those who are on the verge of retirement or has already retired and hence do not really need a permanent job at the same time do not want to spend all their time being idle. Pay scales for the interim CFOs ranges over wide scale. Interims with a lot of experience may earn anywhere around $1000 per day but on a large scale they might end up earning less annually on account of the temporary nature of their job.
Working as an interim CFOs are also associated with a considerable number of drawbacks. Their fees do not include bonuses and timely pay increases. They do not enjoy benefits like health and disability insurance and pension facilities. There are no stock options or incentive compensations provided to them. They have no assurance at the end of one assignment as to where or within what time period the next assignment comes their way. They do not really experience the occasional praises from the boss that the traditional employee receives due to their short stay. To make themselves visible in the market they have to sign themselves up with placement agencies.
These are the pros and cons of being an Interim CFO, but when seen on the brighter side of things the pros out weigh the cons in just a simple fact that in today's world there is a lot of uncertainty with working individuals in sticking with the company for even a few years. Gone are the days when people used to work for 30 years in a stretch in a single company. So an Interim CFO finds himself in a better position, on any given day, as compared to full time professionals.
Terry Mickelson
Terry Mickelson works with B2CFO, USA's largest CFO firm. An Interim CFO works with the business owners to create financial and goal clarity. For more information about about B2CFO visit http://www.b2bcfo.com/part-time-cfo/interim-cfo/ or call (602)296.6888.
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