Wanted: Money master, two days a week
Some small businesses opt for temporary CFOs, JEFF HALE writes

JEFF HALE
Special to The Globe and Mail
April 16, 2007

CALGARY -- When a small business calls on Allan Foerster or Steven Walker, it gets more with less.

Both men are chartered accountants, and both serve as temporary chief financial officers -- popularly known as "CFOs to go" -- for small businesses. They perform the duties of a full-time chief financial officer but on a limited or part-time schedule, working a few days a week for a small company.

Mr. Foerster, of Kitchener, Ont., has been a temporary chief financial officer for seven years and has his own one-man company, CFO 2 Go, Inc. He says increased scrutiny over governance and an emphasis on accounting responsibility, spurred in part by the Sarbanes-Oxley Act in the United States, has made it vital for even small businesses to have a chief financial officer.

But few small businesses can afford a full-time CFO, so hiring a temporary one is a more palatable option.

"My business isn't that extensive or that size that I would need to have one under my umbrella," explains Brian Graham, president of Hard Rock Development, a concrete accessories company in Calgary.

Mr. Walker, 46, the founder and head of BusinessWorks accounting in Calgary, has been Mr. Graham's temporary CFO for four years.

"A guy with that kind of skill set commands a pretty fair salary if he's on an annual number," Mr. Graham notes. "You get some good, sound knowledge for a very reasonable price. That's probably the biggest advantage. You recognize what you're not good at and you get some help."

That kind of thinking helped sway Perry Roach, president and chief executive officer of Netsweeper, a company in Guelph, Ont., that makes software for businesses and schools to regulate what their employees or students can access on the Internet.

Mr. Roach has used Mr. Foerster as his CFO since September, 2005, employing him two half-days a week.

"I get access to a guy like Al -- who would be considered a senior full-fledged CA with experience in the enterprise field as well as public accounting -- for approximately one-fifth of the cost," Mr. Roach explains.

"Does a small to medium business, which is what we are, really need 40 hours a week of somebody like that?"

Mr. Foerster, who is also a full-time lecturer in accounting at Wilfrid Laurier University, and Mr. Walker say they take on about six to eight clients in a calendar year.

"For me to take on a client, they at least have to have an office person, who does the bookkeeping," says Mr. Foerster, 53. "I will meet with the management, usually half a day or one day a week, reviewing sales pipelines, looking at new opportunities, reviewing financial statements, reviewing cash-flow projections, and to liaison with outside agencies like the bank or the tax authorities."

Mr. Foerster attracts clients largely through referrals. Mr. Roach found out about him while playing golf with his bank manager and an accountant; before that encounter, he hadn't heard of temporary CFOs.

"The work just seems to find me," says Mr. Foerster, who does not advertise or use a website.

Mr. Walker, meanwhile, is more aggressive, providing free workshops, using direct mailings and a recently retooled website.

Some temporary CFOs bill by the hour but Mr. Walker prefers a flat fee, ranging from about $1,000 a month to more than $3,000 a month, depending on the duties. Mr. Foerster declined to reveal what he charges, calling it "a competitive secret."

Duties are specified in the contracts signed with clients, but there is room to manoeuvre. "You go in, turn over a rock and go, 'Whoa, I never knew there were these worms under there,' " Mr. Walker says. "It can change in scope like that."

The need for flexibility often means that a temporary CFO is on call, fielding calls at home in the evenings or on weekends. "It makes vacations tricky," Mr. Foerster adds.

Despite the interactions with his clients, Mr. Walker says a sense of isolation sometimes creeps in. "When you're self-employed, you go through these highs and lows," he notes. "When the high is there, it's an adrenaline rush. When the lows are there, it takes a lot of effort and mental stress to pull yourself out of it. The key is to minimize the number and the length of those lows and to build off the highs."

Mr. Walker says he strives to stoke a small company's awareness and to initiate long-term planning.

"I'm not a steward of numbers," he says. "I'm an interpreter, an educator of what it means. Most business owners don't use their numbers that way. They get them and they put them in a drawer, look at them once a year."

Once a client is ready for a full-time CFO, though, Mr. Foerster is happy to bow out. "That's the definition of success for me," he says. "I work myself out of a job. I will often help the client find that [full-time] person and ease the transition."

While the idea of temporary or part-time CFOs is gaining traction in this country, the Canadian Federation of Independent Business has no statistics about the actual numbers involved. But a recent report in the New York Times, citing numbers from Staffing Industry Analysts of Los Altos, Calif., said the demand for temporary financial and accounting staff in that country rose 68 per cent from 2002 to 2006, resulting in an $8.9-billion (U.S.) industry last year. SIA expects the demand to grow an additional 10 per cent this year.

And Mr. Walker, for one, expects to have company in his line of work in the coming years. "A lot of people with good senior experience, especially in Calgary, are soon to be retiring. These are successful people . . . who like to do things, so they are not going to be at home twiddling their thumbs," he says.

"They're going to want to get out there and do things, make a little bit of money lending their expertise to people."

Click here to contact Steven Walker to discusss CFO To Go Services for your business.