Jack Cartmel has gained considerable CFO experience with several companies — often at the same time.
Cartmel, CPA (Canada), is among hundreds who serve as part-time, or fractional, CFOs. Although the consultants do not serve as full-time CFOs, their relationships with companies last years in some cases. In other cases, the CFOs serve on a short-term, temporary basis.
Proponents of the fractional CFO concept say that part-time CFOs help companies understand their CFO needs during early to mid-stage growth periods and save the time and cost of hiring a permanent CFO, whose full role might not yet be defined. In many cases, small- and medium-size entities are able to draw from former full-time CFOs of large organisations who have experience in several industries.
Cartmel worked five years as a CPA with BDO and spent a decade performing accounting roles in the real estate and mining sectors, but he sought more of a leadership role. By 2015, he was working full time with one mining company and consulting for another. Having reached the point where he could make a living as a consultant, Cartmel formed his own company, Numis Consulting, and enlisted clients primarily in the mining sector.
“I’ll parachute in with my team and come and help on a monthly, virtually daily, and any basis to oversee their financial affairs,” he said.
Cartmel provides services mainly to small and medium-size listed companies with market capitalisations ranging from $10 million to $50 million. His role may include management reporting, quarterly financial statements, and coaching board members.
Cartmel, 39, receives a monthly fixed retainer and charges clients at cost for services that he hires. In some cases, he also takes equity in his clients’ public companies instead of charging fees for services. He sees the part-time CFO career trend increasing as finance professionals seek to be their own bosses and set their own hours. He said some accountants in their 50s and 60s are becoming fractional CFOs so that they can cut back their workloads but still have an income.
Sara Daw, the CEO of the UK-based CFO Centre Group, which provides part-time CFOs to companies on a global basis, said the future demand for fractional CFO services is exponential.
Daw’s organisation serves mid-tier entrepreneurial businesses that typically have annual revenues between £2 million ($2.6 million) and £50 million ($64.5 million). The companies generally do not need, do not want, or cannot afford to hire a full-time CFO. But they recognise that they need the skillset on an ongoing or temporary basis.
“Most [small-and-medium-size enterprise and] mid-tier business owners still do not have a part-time CFO,” she said.
The CFO Centre Group provides contract work for about 500 people serving as part-time CFOs around the globe. The group operates in 85 regions across 17 countries and five continents and has served more than 7,500 clients, mainly small to medium-size entities. Each of the group’s part-time CFOs works with between three and ten clients for one day per month or up to four days per week, depending on what companies need.
Daw said the offering can be an affordable option for companies and can also provide a way for business owners to “reach their desires and dreams and change their lives”.
The CFO Centre Group is a holding company for other companies that are branded based on the most acceptable local terminology and spelling, such as The CFO Centre in Australia, Canada, and Singapore; The FD Centre in the UK, Ireland, and South Africa; The CFO Centrum in the Netherlands and Belgium; and The CFO Center in the US.
Clients gain a commercial and strategic CFO partner to help them achieve growth, peace of mind, better decision-making, confidence, and entrepreneurial support, said Daw, who began her finance career with Deloitte, joined a corporation, and became a part-time CFO on a consultancy basis as she sought to balance career and family life. CFOs and FDs, she said, get to escape the stress of corporate work, be part of a team, work with a variety of clients operating in all sectors, and experience new challenges that offer career growth.
“No day is ever the same,” Daw said. “We get to do interesting and challenging work — one day working with a scale-up tech business, the next with a family-owned business looking at succession issues.”
Teams operate regionally
The CFO Centre Group’s teams typically comprise about 15 CFOs or FDs in each region. The regional teams work together to support each member and their clients in the respective regions and work with their national and international colleagues when necessary.
“All of our regional directors and CFOs are self-employed, yet they work with us within our teams,” said Daw. “Once they have joined us, they only work with our clients. Each CFO typically works with us between three to five days per week depending on their requirements, meaning they can build work/life balance and flexibility into their lives.”
As a group of companies, she said, the organisation is growing between 25% and 30% annually. Clients’ fees are shared between the fractional CFO, the regional director, and the group.
The fractional CFOs are qualified accountants who usually have more than seven years of CFO experience and have often held nonfinance board roles.
The CFO Centre Group emerged from The FD Centre, which was founded by Colin Mills, a former corporate CFO, in the UK in 2001. Mills, who is based in Swindon, England, sought to become a part-time CFO and grow the service into a business after the unexpected death of his father prompted him to seek “a more freedom-based lifestyle”, Daw said.
Providing trusted advice
Paul Riegel, CPA (Canada), The CFO Centre’s Greater Vancouver Area regional director, serves as a part-time CFO while also recruiting clients and team members. He said companies receive trusted advice while learning about the CFO role.
“[The companies] don’t even know where to get started with [the CFO function],” he said. “They don’t even know what they don’t know.”
Riegel formerly served as the CFO with Calgary Laboratory Services, an Alberta government-owned medical diagnostics company, and held CFO, finance director, and COO-type roles with law firms in Calgary before he and his wife relocated to Vancouver to be closer to family.
He said The CFO Centre Group appeals to mid-to-late career professionals with the desire and wherewithal to work part time, and the organisation’s business concept is quite different from the typical outsourcing model.
However, while Cartmel and The CFO Centre Group specialise in providing part-time CFO services exclusively, other financial consulting firms, such as Toronto-based Farber Group, include them in general business packages while still engaging consultants.
A growing concept
Ian Brenner, a partner with Farber, said fractional CFOs can provide companies with a unique opportunity to educate themselves on their CFO needs while sparing the expense of a full-time executive when the required role is uncertain.
Brenner, a CPA by training, joined Farber after spending four years as an interim and part-time CFO with a private equity company that invested in distressed assets during the global financial crisis. He began doing fractional and interim CFO work with Farber and expanded the company’s offerings in those niches.
In 2015, Farber began to offer executive search services, which complement the fractional and interim offerings.
Brenner said the use of fractional CFOs is very common in Europe, where the practice has been deployed for decades. Companies in other global regions, and particularly in Canada, are only beginning to grasp the value of the concept.
“I’ve seen more awareness in the seven or eight years that I’ve been helping clients source talent,” he said. “But it still has a long way to go. Businesses have to understand a part-time CFO is a real option in the appropriate circumstances.”
— Monte Stewart is a freelance writer based in Canada. To comment on this article or to suggest an idea for another article, contact Neil Amato, an FM magazine senior editor, at Neil.Amato@aicpa-cima.com.