The “interim” title is one that the corporate world has traditionally not savored. It can evoke negative sentiments of instability and fleetingness. But as times change, so do views. To keep up with the fast-paced and rapidly evolving corporate climate, more and more companies are employing the services of interim chief financial officers (CFOs) to man the financial sails during times of flux.
Keep reading as we explore the rise from all angles and discuss their key role in providing leadership in times of transition.
What Is an Interim CFO?
An interim CFO is a temporary financial executive. They fill a company’s role of Chief Financial Officer on a limited time or as-need basis. They can act as a consultant during a time of transition. They may also step in when a full-time CFO is needed but not yet hired.
The leadership of the role provides much-needed strategy, stability, and oversight amid corporate flux. They can guarantee financial continuity and strategic planning for the business until a permanent solution is found.
Why Is There a Rising Need?
The demand for interim CFO services has skyrocketed recently. Statistics indicate that the need for interim CFOs surged by 46% in 2024.
There are various reasons for this spike, including:
- Budget shortfalls - full-time employees are expensive. Some 80% of businesses operate without a CFOs, with many indicating the cost of the full-time position as prohibitive.
- Economic headwinds - factors such as rising interest rates, inflation, and geopolitical tensions are causing companies to enlist the support of interim CFOs to help navigate these challenges.
- Evolution of the role - many of these positions now have some degree of oversight in technology, supply chain, and legal, with an interim seen as an efficient solution to help absorb the increased responsibility and bridge skill gaps.
- Talent shortages - there is a stark shortage of qualified candidates to fill full-time CFO positions
Other factors contributing to the demand for interim CFOs include extended leaves of absence, increasing shifts to hybrid work environments, and a more favorable perception of interim roles.
Benefits of the Role
As mentioned, they can provide key financial leadership during times of transition. This can yield myriad advantages for the company.
The stability offered during a role transition can help keep the rest of the professional team focused on their tasks. They can focus on their core competencies without having to feel like they need to absorb some of the responsibilities vacated by the Chief Financial Officer’s departure.
An interim can do wonders during a business restructuring. In addition to their key role in analyzing the financial health of the company and planning strategies for the reorganization, they can offer a fresh perspective for managing stakeholder relations to guide the company through the restructuring process.
Interim CFOs are also highly beneficial when preparing for fundraising rounds. They can ensure financial accuracy, build compelling presentations, and manage cash flows to help companies navigate the complexities of securing investment.
When to Consider the Demand
As seen by the increased demand for the role, there is no shortage of scenarios in which to consider onboarding an interim CFO. A leadership gap is the most apparent. This may be due to a sudden departure, extended leave of absence, or difficulty in filling the vacant role.
Even if a permanent Chief Financial Officer is in place or your company operates without a CFO, hiring an interim CFO is a great idea during major corporate events. Their mergers and acquisitions services can provide the necessary guidance on due diligence, risk assessment, and integration for a seamless transition.
An interim CFO is also tailor-made for temporary support. They can help a company bridge a skills gap. They can also be a great option as a “temp-to-hire” solution if the business wants to evaluate the fit before committing to a full-time role.
Examples of Interims in Action
Now that you know exactly what an interim Chief Financial Officer is and how it can benefit a company, here are a couple of hypothetical examples of the diverse roles they can occupy:
- Inventory management during rapid growth: A fast-growing consumer products company over-ordered inventory based on optimistic forecasts. The interim CFO comes in and halts new purchase orders, analyzes existing ones, and identifies slow-moving items, freeing up cash and opening up warehouse space.
- Navigating financial crisis: A company is facing a payroll shortage. The interim CFO implements cost-cutting measures, restructures operations, and explores new revenue streams to improve profit margins.
Other examples of the interim role in action may include preparing for an IPO, strengthening financial compliance, and improving resource allocation.
Consider an Interim Chief Financial Officer to Navigate Business Near-Term Financial Challenges
To help navigate an increasingly complex corporate financial landscape, more companies are turning to interim CFOs to give them an instant dose of expertise and leadership. Whether you are preparing for a round of fundraising or looking to bridge a leadership gap, consider the various ways that an interim CFO can benefit your enterprise.
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