Hiring a finance director is a significant investment for a business, and the often-exhausting process usually comes at the most inopportune moment. Our advice is to appoint an interim finance director to support the business through the transition and enable the CEO to focus on making the correct long-term appointment.
In our latest blog, we introduce the role the interim finance director can play in helping early-stage and growing entrepreneurial technology businesses fill the chasm left by the outgoing finance director.
Estimated reading time: 5:00 minutes
Arguably, the most crucial relationship at the executive team level is the dynamic between the CEO and the finance director, so it’s essential to take the time to find the right person for this pivotal position.
Replacing an outgoing finance director or finding cover for long-term leave can be a daunting prospect, particularly if the CEO is time-constrained.
So, what’s the solution?
An interim finance director can ‘hold the fort’, and so much more
An option growing in popularity amongst entrepreneurial technology business is the use of an interim finance director; a flexible resource which can fill the void created by an outgoing finance director.
As well as taking control of the company’s finances, ensuring the cash is flowing and supporting fundraising if required, they can unlock resources within the company and enable the CEO to devote more time to find the most appropriate replacement.
The changeover of a finance director can create a chasm, which if left unaddressed could be filled by the wrong people.
The permanent finance director (FD) required at present may differ from the Chief Financial Officer (CFO) needed in the future, so it’s essential to recruit the right interim finance director to manage this transition.
The interim arrangement has many advantages:
- An experienced interim finance director can join the team at short notice before the incumbent finance director has left the business and provide cover and continuity, ranging from a few weeks to a few months.
- Their presence will bring stability and continuity to the finance function at what can be a particularly unsettling and uncertain time for the existing team.
- The CEO can continue to concentrate on company leadership, innovation and revenue-generating activities without being distracted by accounting and finance responsibilities.
- They can support the CEO before, during and after the permanent finance director recruitment process:
- By providing a professional opinion.
- By drafting the job specification.
- By reviewing candidate applications.
- Once the permanent finance director is chosen, the interim can cover the incoming finance director’s notice period and provide a comprehensive handover to ensure he/she is fully briefed and able to seamlessly integrate into the business.
- Beyond the recruitment process, banks, investors and other key stakeholders will be reassured that a competent, knowledgeable and reliable finance director is in place through the transitional phase.
- Similarly, the interim can also provide additional support and mentoring to phase the incoming finance director into the new environment.
How to choose the RIGHT interim finance director for your business
What makes a successful interim finance director?
In the interest of brevity, it’s a given that the interim finance director needs technical knowledge and expertise, but it’s also essential to consider the skills and experience that differentiates one interim finance director from another.
- They will be expected to inject fresh motivation, stability, direction and balance into the finance function.
- They should have the ability to provide industry insight and strategic support to the CEO.
- An interim finance director who works without a personal agenda will be motivated to drive growth in the business, and not their career. They will be more effective in providing a balanced opinion in matters of importance.
- A track record of working with companies at a similar stage of growth, on an interim basis. For example, an operational finance director required for a business in steady-state will have a different type of experience to a fundraising specialist required by a startup or a turnaround expert for a business in decline.
- An interim finance director whose personality exemplifies the company culture is crucial in setting the tone for the organisation.
- Often, it’s prudent to find an interim who has a different approach to other people within the organisation. Such an appointment can be the catalyst for business change and positive competitive tension.
During the interim finance director recruitment process, it’s useful to think about the following questions:
- How experienced are they in dealing with the specific opportunities and challenges faced by the company?
- How well does the candidate supplement the skills of the existing team?
- How extensive is their network? If he/she encounters an issue, can they call on the support of a wider team?
- Will they be available for the whole of the required time frame?
- To what extent is their agenda going to impact the business?
- What relevant ‘soft skills’ and personal qualities are required?
- How much experience do they have in managing the finance function of a business as it expands into new markets?
How can iFD help?
At iFD we provide interim FD services to early-stage and growing entrepreneurial technology businesses at short notice.
Our interim FD services can be blended with fully outsourced accounting and HR solutions, supported by a network of experienced accounting and finance professionals.
We have the quality control and processes in place and can supplement the interim FD services with varying levels of resources.