I’m a big fan of renting a CFO versus owning a CFO in most companies. There are several reasons I believe this is a good idea. Among them are having your rent a CFO start moving your company from the usual tactical measurements to strategic ones that can dramatically drive the value of your company.
One of those strategic activities is in the realm of installing and measuring KPI’s in your company. A good rent a CFO should have a very strong skill set in developing KPI’s (key performance indicators) as well as putting together the drivers the make the KPI’s move. In fact, I think this is one of the most useful things a CFO can do for any company.
When you are thinking about bringing a part-time or rent a CFO into your organization you are moving from strategic thought to strategic action. I also believe renting a CFO often makes more economic sense than having a full time CFO work for your company.
Here are some strategic reasons you would want to rent a CFO versus owning a CFO as it relates to assembling strategic KPI’s in your company.
Your rent a CFO has the opportunity to work with several companies. Industry knowledge is important. At the same time having a CFO who has seen a large number of different measurement systems allows them to bring the best they’ve seen to your company.
Renting a CFO allows you to easily move on. Installing strategic measurements and using them is a skill set that doesn’t often need a long-term relationship over several years. When you hire a CFO as a consultant or outsource this skill set you can bring in a person who has the specialties you need. Once this need has been filled, you can either move on or stay with your CFO consultant based on their skill set.
Having a CFO as a consultant encourages this person to stretch their abilities and stay current. If you have a CFO who is a consultant, this person is more likely to stay current and keep their skills up to date. Knowing that your engagement might be temporary puts more pressure on the consultant CFO to continue adding value rather than having a full time CFO person in your organization.
As usual I started writing about a consulting CFO being a great way to institute strong KPI’s in your company and have moved to why I believe consulting CFO’s are for the most part a better deal for private business owners.
Both of these activities will start you moving towards being more strategic which is the first step in changing your relationship to your business.
I’ve written a special report on using key metrics in your business. I encourage you to download this report by clicking on the button below. I believe you’ll find this report fits in nicely with the entry above.