Navigating Short-term Financial Challenges With Advice from Interim CFOs?

Manufacturing companies encounter several short-term disruptions at different points, which result in financial challenges. Some companies may not have capable financial leadership to navigate such situations. However, they may not need full-time in-house CFOs on a permanent basis. Interim CFOs come to their rescue in these situations.

CFOs who provide their services on a short-term, on-demand basis to manage a company's temporary financial challenge are called interim CFOs. 

When should you hire an Interim CFO?

Stopgap before the new CFO joins

A manufacturing company might need the services of an interim CFO to bridge the stopgap between the current CFO's exit and the new CFO's joining date.

Merger & acquisition or a strategic expansion 

A temporary need for interim CFO services can also arise when a company undergoes ownership changes, such as a merger or acquisition or a strategic expansion into new markets or products. It doesn't have an in-house CFO to handle the deal or needs an extra pair of hands to assist the negotiation process.

You are a manufacturing startup looking for funding

A temporary need to seek advice from a CFO or a finance expert can arise when a manufacturing startup does strategic financial planning to attract venture funding.

How do Interim CFOs operate?

Interim CFOs are not full-time in-house cfo consulting advisors to their clients but are expected to manage the client’s internal finance team and their challenges from day one.

Interim CFOs don’t get the ‘settling-in’ period and are expected to deliver results fast. Hence, they have to do their homework before the start of the assignment.

For a manufacturing company hiring interim cfo services, they will need to give the interim CFO access to the following:

1. All relevant financial records
2. An introduction to all the leaders and decision-makers
3. Complete details of the crisis or challenging situation for which they were hired
4. Details of the company’s competitors
5. Clear goal or outcome for their engagement

The interim CFOs have a limited time to achieve their goals, and the following three actions will set them up for success:

• Understanding the internal finance team, their strengths and weaknesses
• Preparing a detailed project plan
• Maintaining open communication with the client.

Virtual CFO Services

Many virtual CFO services firms in metro cities such as Mumbai, Bengaluru, Chennai, Hyderabad, Pune, and Delhi offer interim cfo services. These services are on an on-demand basis or as an assignment. 

CFO Bridge is a leading firm with the presence of CFO Partners in these metro cities.

Check out what their clients say about their virtual cfo services and interim cfo services.

What are the benefits of hiring an Interim CFO?

• Interim CFOs provide strategic and operational support to overcome the short-term challenging situation faced by the company. They restore the manufacturing company's financial stability.
• Interim CFOs can offer virtual CFO services and work remotely or in a hybrid manner. This gives clients flexibility and the opportunity to hire experts regardless of location, which can be in remote industrial areas where local financial talent may not be readily available.
• Interim CFOs implement quick-fix solutions to keep the company running smoothly, mainly due to their vast experience with other companies facing similar circumstances.   

What types of services do Interim CFOs offer?

• Solving short-term financial challenges
• Designing a short-term financial strategy
• Managing working capital and cash flows
• Improving inventory management
• Suggesting risk management and compliance best practices
• Deal negotiation and advising on Merger and acquisition opportunities
• Optimizing the benefits derived from process automation tools such as ERP

Why should manufacturing companies hire interim CFO services?

A recent article published in The Week states, "India's March manufacturing PMI rose to its highest level since 2008. Manufacturing companies expanded hiring in response to strong production and new orders. On the back of strong demand and a slight tightening in capacity, input cost inflation picked up in March," Ines Lam, Economist at HSBC, said.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) surged to a 16-year high of 59.1 in March from 56.9 in February. This reflects stronger growth in new orders, output, input stocks, and renewed job creation.

With technological advancements in Industry 4.0 and pressure to remain competitive yet profitable, the Indian manufacturing industry needs immediate help from virtual and interim CFOs. Once they secure the financial leadership, the founders and managers are free to focus on the areas of their expertise. 

How do you select the right interim CFO for your business?

• A proven track record in financial leadership roles.
• Relevant degrees in finance, accounting, or a related field.
• Familiarity with your industry and understanding of its unique challenges.
• Communicate financial insights clearly to non-experts.
• Check references to validate their previous successful interim roles.
• Or you can talk to CFO Partners at CFO Bridge, who will connect you with the right interim cfo for you.

Book a free consultation with the CFO partner here.