Temporary CFOs Add Up to Affordable Finance Expertise

By Carol Tice

Entrepreneurs often aren't numbers people – they invent things, have great ideas, see market opportunities. But analyzing trailing accounts receivable trends? They're usually not so enthusiastic about crunching those kind of numbers. At the same time, often a small-but-growing company isn't in a position to afford a six-figure chief financial officer, even though the business could really use one.

The answer is to hire top expertise on a part-time basis.

Temporary CFOs have become a booming niche that allows startups to get expertise they need, and financial pros to enjoy a more varied work life. A Google search on "temporary CFO agency" gets nearly 650,000 hits.

Take Evan Rogoff, an Atlanta-area CFO who started his finance career the usual way, toiling at a big accounting firm and segueing from there to a big corporation. Sounds great on paper, but Rogoff says he found the environment stifling and annoyingly bureaucratic.

Now, he usually works for five different startups at a time, heading to a different company's office each day of the week. He says he provides a critical sounding board for CEOs who are often "on an island" by themselves without other senior managers to give them feedback.

"What all entrepreneurs need," he says, "is someone to help on the finance side. Someone who can bring that big-company financial discipline, but make it fit what's appropriate to their company's stage."

The typical company that hires a CFO is fast-growing but hasn't landed venture capital, Rogoff says. Once VC money comes in, the company usually has the resources to hire a full-time CFO, he says. With venture capital harder to come by these days, more companies are looking for part-time or temporary CFOs. In small companies, CFO turnover tends to be rapid anyway, so hiring a temp avoids costly severance packages and resulting chaos when a top financial executive suddenly departs.

When money gets tight at a company, having a "weenie finance guy" around means there's someone who can suggest options for improving cash flow the entrepreneur might not consider.

"They'll think of squeezing vendors for better terms, or lining up a bank line of credit," Rogoff says, "where the entrepreneur will say, 'I just need one more customer.'"