Interim management has arrived, and it only took 50 years, from a specialty that started in the Netherlands and moved slowly around the world. And its first and best incarnation is the interim CFO.
A good Chief Financial Officer will help a business catapult to the next stage of growth. Whether public, private or private equity backed, a CFO leads and implements strategy that ultimately creates value for shareholders, increasing EBITDA and cash flow. The means to get there may look different for each organization, but companies choose to bring in an Interim CFO because they are looking for transformation:
Operational Improvement and Strategic Planning
An Interim CFO will streamline accounting and financial reporting, helping owners, board members, investors and the management team get a clear look into the state of the business. Interim CFO services include strategic and tactical responsibilities such as short-term and long-term financial planning, budgeting and forecasting, risk and compliance, and operational improvements from ERP implementations to BPO implementations to SOX compliance. An Interim CFO may pass the baton to a permanent hire with a solid foundation and strategy in hand, or they may take the company through the next stage of growth whether that be acquisition, sale, or IPO.
Case Study: Fractional CFO of Founder Owned Technology Software Company
The founder of a company providing audio solutions to companies reached out when he realized the company was not operating efficiently. Dealing with very large F500 clients, the company needed a CFO to provide discipline, structure, policies, and a clear P&L.
Result: A Fractional CFO helped manage the fast growth of the business, putting infrastructure and process in place to ensure a great customer experience.
Capital Structuring and Investor Relations
As a company grows, investors expect that financial reporting will become more sophisticated. An Interim CFO may step in to manage this increasingly rigorous function, handle investor relationships, interfacing with investors and boards while managing any capital needs. The CFO will explore possible capital structures from capital raise to equity and debt financing to taking a company public.
Case Study: Interim CFO of $170M Digital Marketing Company
When the full-time CFO of digital marketing services company resigned, a temporary CFO was deployed to oversee all financial functions, help the President position the company for future sale, and ready the VP Finance to step in the permanent CFO position.
Result: Interim CFO completed a business plan for the year ahead and transitioned the VP Finance into the permanent role, providing him with the tools to ensure a successful handoff.
Selling Your Business or IPO
When an owner or investor decides to sell the company, they can get caught flatfooted. With fast growth, systems can get strained or only work with duct tape and bailing wire – problems with reporting or operations that were never fully addressed. This could scare off potential buyers or investors, or ding the sales price. An Interim CFO will address any outstanding problems and prepare the company to make it through a diligence process, packaging the company up to receive maximum value. Once it’s ready for show time, a CFO will help lead the sales process, review contracts, and ultimately help an owner or investor receive that desired payday.