Part-time Finance Director

Do you need a part-time FD?

I make a living speaking to business leaders. What has surprised me is just how many don't have an experienced finance lead on a full-time (five days) or part-time basis.

Some of the leaders I've spoken to are in moderately complex operations with no finance skills whatsoever. They also tend to be the leaders with some horrifically expensive debt weighing them down.

If you're reading this and you represent an ambitious organisation, the answer is probably yes, you do need a part-time FD, but to be sure, here are some common indicators:

• Your finance team is overworked
• They appear to have low morale
• Day-to-day finance activity, including management information (MI) and financial reporting, is produced slowly or not at all. If you've had limited MI to review in Board meetings this includes you
• The finance team do bean-counting and no business partnering
• The "accounting systems" are always being criticised by staff
• Financial planning e.g. the budgeting process is nonexistent
• You have no business plan and no business strategy
• Nobody within your organisation can offer strategic planning advice
• The board of directors lacks a finance professional who is a qualified accountant
• Nobody is focusing on coaching and staff development
• Your management team is competent but lacks extensive experience, particularly with strategic roles
• Within your business, nobody has start-up/scale-up experience
• Nobody "owns" the financial management of the business

You may also have one-off projects that you want to enact but have a skills gap. The right non-permanent, part-time financial director, or interim FD can add significant value with the below:

• You're interested in raising equity or debt but don't have the specialist skills in house
• You're considering M&A or a business exit
• You're planning a system migration or system implementation

In my opinion, these are all a fantastic opportunity to find the right finance director (FD)/chief finance officer (CFO) for the needs of your business. Now the question is full-time, interim, or part-time.

The difference in price between a one day per week self-employed consultant and a full-time employee, at this level, is a big one. So, in reality, I suspect the choice between a part-time finance director and a full-time finance director really boils down to cost. Whether to go for an interim FD or not should be led by the demand — so if it's a one-off project, an interim will make more sense.

When is a part-time finance director better than a full-time finance director?

In honesty, senior finance roles are expensive, so a part-time finance director is your only option if cost is your limiting factor. There's no point even considering a full-time position if you can't financially justify it.

I appreciate the argument that you need to spend big to get top talent, just not as much as I respect the argument of increasing costs gradually, in line with revenue growth. A part-time FD is a perfect fit if you want to gradually increase operating expenses proportionally with revenue growth.

Cost aside, there is a strong argument that there is a disproportionately high benefit in a part-time FD vs a full-time FD due to Parkinson's law. Any proponents of Parkinson's law should source their ideal candidate from part-time FD candidates.

The successful candidate may also be able to make introductions to help expand your network. He/she is likely to have several useful business contacts that you can leverage. Their system and software experience is likely to be more wide-ranging as well. This first-hand experience can be crucial when selecting systems, particularly if you have this as a project.

What can a part-time finance director do for your business?

The depth of talent in your finance team and hours worked will dictate what tasks your part-time FD does for you.

Much of the day-to-day tasks of the finance function are time-consuming and can be performed by junior staff. So, to get full value the successful candidate should be paired with a bookkeeper or more junior finance staff.

Common examples of where a part-time FD can help include:

Reporting, Budgets, and Budget Process

• Budgetary responsibility: including annual budgets and relationships with budget managers
• Forecasting
• Reporting on interim results and statutory annual reporting
• Cashflow
• Profitability- revenue and costs
• Efficiency
• Advisor to Board and C level execs
• Internal controls review
• System migration or system implementation

Training and Development

• Develop and train finance team
• Essential finance training for non-finance staff

Strategy and Funding

• Acting as a business partner and advisor on strategy, growth, and growth funding
• Provide a strategic role that may be missing within your team
• Investor relations, including ad-hoc investor information
• Advice on strategy
• Exit planning
• Expand your network

Flexibility

• No long term contracts
• Flexible arrangements
• Not overbearing, will be to the point if time constricted
• Short engagement turnarounds

How often does a part-time finance director work?

Part-time hours can be made up in a variety of ways, but you should agree on how many hours per week will be spent on your business. Typically, a part-time finance director will spend 1–2 days per week on each portfolio business (they will likely have other part-time roles). In some cases, it can be less, particularly if the contract is temporary and the assignment is tailing off.

A part-time basis can also allow for more flexibility which may suit both you and your part-time FD but you should expect to be locked in for a minimum monthly fee as not many part-time FDs will offer a pay-as-you-go service.

The need may be for more time investment early on, then less as the part-time FD develops staff and introduces efficiencies. Depending on how the finance staff develops and the responsibilities they take on, the part-time FD could even be reduced to a quarterly basis and adopt more of a non-executive director role.

How to recruit a part-time finance director

If your drains are blocked you either call Dyno-rod or you call the local guy.

You're either the sort of person that gains comfort from using a "franchise brand" or "franchise operator", or you see value in going direct to someone independent.

There are pros and cons for both choices but you're probably going to use your own judgment, based on your own experience. So, rather than focusing on the source of your part-time FD, I'll focus on the characteristics you should be looking for.

• Extensive experience is important, but the right kind of experience is crucial. Focus on a proven track record of achievement rather than how many years of service they have
• Be task-specific. If you're a pre-revenue business there's value in a part-time FD with experience in early-stage businesses or perhaps a funding specialist. Match your needs with their experience and skills
• If cash flow is tight and annual budgeting is crucial hire a part-time FD with extensive budgeting expertise
• Strong communication skills both oral communication and written
• A team player with great interpersonal skills
• Someone that can be entrusted with the smooth running of the finance function

I'd love to hear from you if you're considering taking on a part-time FD. This guide has only gone over general topics. I'm happy to give pointers relevant to your unique situation.