Published In: Puget Sound Business Journal on October 20th 2006
Author: Deirdre Gregg
Tom Varga may not put out fires for his clients, but he comes pretty close. A few years ago, a Bellevue computing company lost everything in a fire and called Varga’s firm, CFO Selections LLC, for help. Varga brought in a team of financial execs to help the company get an insurance payment and set up operations in a warehouse.
Bellevue-based CFO Selections hires seasoned financial professionals and matches them with small- to medium-sized companies on a temporary basis. Varga said his employees help companies put together a solid foundation of strong financial controls and internal processes.
“They need the level of expertise that comes from 10 to 20 years experience, but they only need them part-time and can’t afford them full-time,” he said.
Right now, CFO Selections includes 17 part-time chief financial officers who are working with about 45 clients, including a chocolate manufacturer, a couple of wineries, a travel agency, a telecom and a biotech firm. Revenues grew from $220,000 to $1.12 million between 2003 and 2005, an increase of more than 412 percent.
In May, Varga started recruiting permanent CFOs. CFO Selections has placed about half a dozen permanent CFOs so far and has another half a dozen searches under way, he said.
Varga started his company in 2002, when he was an interim finance consultant himself. That was just the time when the CFO’s job was getting more complicated. The federal Sarbanes-Oxley Act of 2002 required public companies to document and test internal financial controls.
Sarbanes-Oxley and increasing scrutiny from shareholders and regulators have driven churn in the finance chief’s office. CFO turnover was 50 percent higher in the first half of 2006 than in the same period in 2005, according to a survey by New York-based Liberum Research.
The focus on internal controls has trickled down from the public companies to private companies and even nonprofits, where boards of directors and advisers are asking management to implement some aspects of Sarbanes-Oxley, Varga said.
“They’re picking and choosing the stuff out of Sarbox that’s good,” he said.
Varga said more than half of the firm’s clients are referred by other clients. Another 40 percent come through referrals from other professional services firms, such as law firms, accountants or banks.
Varga said he interviews about 10 candidates for every person he eventually hires. He’s looking for candidates with years of experience who are flexible and interested in part-time rather than full-time work.
“Almost to a T they have gray hair,” Varga said. “You don’t get 20 years experience without gray hair.”
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