Tom Calamia was 47 when The Shaw Group, a Fortune 500 company where he had previously been a divisional CFO for 14 years, got acquired. He stuck around for a month to help with the transition. But after more than two decades in high-stress corporate jobs, he was ready for a change—one that offered more flexibility and fewer people-management responsibilities.
So, he went freelance.
Calamia launched a solo accounting consulting firm from his hometown of Simpsonville, S.C. Not long after, a neighbor told him about Upwork, an online platform that matches freelancers in a variety of fields with businesses in need of contract workers. Calamia researched the site and created a profile. He landed his first project soon after, reviewing a California company’s financials to help it identify the benefits of recycling computer parts.
That was in the fall of 2013. Since then, Calamia has built a steady clientele through the platform. For some he works as a virtual CFO. For others he helps close the books or tackles special projects. He also picks up one-off work on a regular basis. Although a majority of his business comes from industry contacts and referrals, Upwork now generates 35% to 40% of his income. It gives Calamia the opportunity to see what companies are looking for and whether their needs match his skills and talents.
These days, more finance and accounting professionals are heading in the same direction. As the freelance population grows, so are online match-making services that allow them to market themselves. Think Match.com, but for CFOs and accountants to find work.
Embracing the Gig Economy
It’s standard practice for fast-growing companies to use interim or virtual CFOs until they reach the size where they can hire a full-time, in-house finance chief. Many larger companies also fill temporary finance and accounting positions through staffing agencies. And regional small and midsize businesses have long worked with local CFO consultants.
But the dynamics are changing. A tight job market has piqued corporate interest in the gig economy and the use of contingent workers. And companies that have migrated operations to the cloud can more easily manage remote and temporary workers of all kinds, says Clara Sieg, a partner and founding member of venture capital firm Revolution Ventures. Sieg is an early investor in Paro, a niche freelance platform for independent finance and accounting professionals.
Freelance opportunities might also appeal to hard-working associates who’ve been toiling away in public accounting for a few years. “When you zoom out to the broader market and look at the Big Four, where a junior accountant is billed out at 200% to 300% of what they’re taking home, you realize that the structure in the public accounting industry is skewed because of partner expenses,” Sieg says. “If you take those out, you have a viable business model.”
According to a 2018 survey by Deloitte, CFOs expected their use of outsourced and contingent workers to supplement full-time staffs to increase by 88% through 2021.
That forecast dovetails with a widening interest in freelancing as a desirable way to work. Today, about 35% of American workers (57 million people) do freelance work, according to an October report by Upwork and the Freelancers Union.
The proportion of U.S. workers who freelance by choice rather than necessity has grown to 60% from 53% in the past five years, according to the report. The share of people who freelance full time has also grown, to 28% this year from 17% in 2014.
Specialism vs. Generalism
Since launching in mid-2016, Paro has amassed a database of finance vice presidents, controllers, financial analysts, CPAs, and internal auditors. They go through a screening process before being accepted to offer their services. The company has reviewed about 50,000 applications to date and currently has somewhere in the high hundreds to 1,000 professionals in its database, all U.S.-based, according to CEO Michael Burdick.
Burdick maintains that Paro has a leg up on all-purpose freelance match-making sites because of its proprietary, rigorous vetting process and proprietary algorithms for matching people’s specialties to corporate clients’ needs.
The $16 million in total funding the Chicago-based company has raised is a sign that a profession that’s traditionally been risk-averse is warming to a new way of doing things, Burdick says. “It’s changing as baby boomers retire and millennials replace them in roles,” he says. “Millennials are three to four times more likely to hire freelancers.”
Most of Paro’s competition comes from generalist freelance match-making sites. One of the largest is Upwork, which started out as a place to find low-paid gig work but has lately attracted more skilled knowledge workers, including finance and accounting professionals.
Four of the 10 highest-paying skills on Upwork are in finance and accounting, according to a company report published this year. That includes legal entity restructuring ($255 per hour), using BlackLine software for financial close ($220), working with bitcoin ($215), and financial reporting under international accounting standards ($215). Hourly rates on the site have doubled since 2015 for U.S. freelancers, and 65% of flat-rate projects listed pay more than $1,000, according to the company.
Some successful finance leaders join Upwork to become interim CFOs, and some are even going into the business of coaching young high-potential finance professionals, notes CEO Stephane Kasriel. Such people are among Upwork’s highest earners. So far, though, C-level or other upper management finance and accounting professionals such as Calamia remain “a pretty small portion” of its freelancers.
Not to be disrupted, LinkedIn launched its ProFinder business nationwide in 2016 to match LinkedIn member companies or individuals with service-provider members in about 14 categories. Accounting is among the top 10, and requests for accounting-related requests for proposals (RFPs) more than doubled from 2017 to 2018, according to Vidya Chandra, principal product manager for LinkedIn Premium.
LinkedIn declined to disclose the number of RFPs or whether demand for the service has grown since 2016.
The Cost of a Virtual Shingle
Freelance marketplaces for finance professionals have different business models. On Paro, users set their rates and corporate clients are charged a fee on top of that, so freelancers don’t pay anything, Burdick says.
On LinkedIn ProFinder, once freelancers are approved they can respond to up to 10 project proposals for free. To bid on more, they have to upgrade from a free LinkedIn account to the service’s Premium Business level, which is $59.99 a month (or $575.88 a year). In July, LinkedIn added an expanded skills section to all user profiles, making it easier for members to showcase their skills, even if they’re not on ProFinder.
Upwork, in contrast, charges freelancers per-assignment commissions on a sliding scale: 20% on the first $500 earned from a single client; 10% on billings of $501 to $10,000; and 5% on anything over that. In addition to listing the services they offer on their profile for prospective clients to see, freelancers can bid on jobs that companies post on the platform.
To bid on those gigs, Upwork charges a nominal amount of tokens called Connects that cost 15 cents each, in part to cut down on spammers who in the past clogged up the job bidding process. Upwork also offers a premium Freelancer Plus account for $14.99 a month that includes extra Connects and other perks.
Fiverr, another generalist online marketplace, charges freelancers a 20% transaction fee regardless of project size. Buyers of freelance services are charged $1 on top of any freelance work that costs $20 or less, and 5% of the total cost of the project for anything over that. The project buyer places a freelancer’s fee into an escrow account until both parties agree that the project has been completed to previously specified parameters. Freelancers can get approved to upgrade to the free Fiverr Pro level, which could land them at the top of search results and result in more work. A Fiverr spokeswoman declined to comment on finance and accounting professionals’ activity on its site.
Freelance platforms won’t replace word-of-mouth recommendations as the primary way that independent finance professionals and virtual CFOs find work, says Jeff Moore, a CPA and business consultant in Atlanta who’s worked as a part-time and interim CFO and forensic accountant since 1984. “That will prevail over someone you meet online and have to vet on your own,” he says.
Still, Moore — who’s used Upwork to hire a freelance bookkeeper but never to look for work for himself — agrees that such platforms are a viable option for finance and accounting professionals, especially younger ones who lack an established network for referrals or work.
Back in South Carolina, Calamia networks locally, checks in with past customers for referrals, and monitors Upwork once or twice a week for interesting projects. In the six years since he started using Upwork, according to his profile, he’s completed 22 projects from which he earned more than $55,000 each.
The work he gets through the platform contributes to an average work week of about 25 to 30 hours, giving him the work-life balance he sought when he opted to go solo.
“I think you’ll see freelance accounting grow,” he says. “People are getting to the point where they want more freedom and variety, and on the employer side, companies are comfortable with not having someone they can walk down the hall to talk to.”
Michelle V. Rafter is a freelance writer based in Portland, Oregon.