Are your finances getting to be too much to handle, but your business isn’t big enough yet to justify hiring a full-time CFO? Did your CFO resign and you need an interim CFO during the hiring process for a replacement?
If the answer to these questions is yes, it might be time to hire a fractional CFO. Here, we’ll go over what fractional CFOs do, how to know when to hire one, and some key benefits you can experience when you work with a fractional CFO. Let’s get into it.
What Does A Fractional CFO Do?
CFOs, both full-time and fractional, look to the future of your business. While full-time CFOs are a permanent part of the company, you would hire a fractional CFO for a certain period of time or for a project in order to assist with specific financial needs. Also known as outsourced or part-time CFOs, fractional CFOs are financial professionals who provide high-level financial management and strategic guidance to a company.
Some of the things fractional CFOs do include:
- Improving cash-flow
- Enhancing financial systems
- Improving growth and profitability strategies
- Assistance with mergers and acquisitions
- Recommending new software to improve financial systems
- And more.
Why Hire A Fractional CFO?
When you hire a fractional CFO, you get to enjoy the benefits of a CFO’s services, at a fraction of the cost of hiring a full-time CFO. This is beneficial to small businesses who may not have the resources to hire a full-time CFO, as well as to bigger companies who need someone to step into this role during a transition period while conducting the hiring process for someone permanent.
The reason for this is because as business growth accelerates, financial teams may struggle to keep up with the business’s needs or not know how to negotiate terms and other such complexities. A fractional CFO sees to strategic planning and analysis, negotiation, and cross-functional work to ensure that nothing falls to the wayside. They understand how to ensure that your business is operating according to the demands of the CEO, the board, and the investors.
Signs It’s Time To Hire A Fractional CFO
Many companies don’t start out with a financial team in place. This typically comes with growth. As your company grows, so does the need for a financial professional on your side, which is when you’re start thinking about whether it’s time to hire a fractional CFO.
Fractional CFOs help you model your business to be future-proof. They’re your partner, who help you strategize and avoid any financial pitfalls that could endanger your company.
Some signs you should start thinking about whether to hire a fractional CFO include:
- You need financial leadership.
- Your business is growing quickly.
- Your business is expanding into new markets.
- Your business is making money, but not profit.
- Your business needs to fundraise.
- You’re not confident in your books.
- Month-end close is taking too much time.
- You need to reconcile a lot of accounts.
- And more.
If you’re asking yourself if your business need to hire a fractional CFO, the answer is likely yes. You can schedule a consultation with a fractional CFO firm in order to best determine your needs.
As your business continues to grow, you may eventually need to hire a full-time CFO, as the roles and responsibilities you need filled exceed the time constraints of an outsourced, part-time professional. Your fractional CFO will let you know when it’s time to start thinking about implementing a full-time financial executive instead of utilizing their services.
Key Benefits Of Working With A Fractional CFO
#1. Expertise
Fractional CFOs are seasoned professionals who have a breadth of expertise across industries. As they usually work with multiple clients simultaneously, they have more ongoing experience to pull from when advising and leading your organization.
#2. Cost-Savings
Fractional CFOs bring all the experience of a full-time CFO, instantly saving you the cost of hiring a permanent professional. They also allow you to bypass expenses associated with hiring someone in your company itself, such as payroll taxes and other such employment expenses.
#3. Flexibility
Your fractional CFO’s work can be to your business’s needs. You can ask for increased support during critical periods and then revert back to a more consistent level when evened out.
#4. Objectivity
As a fractional CFO is someone you hire, rather than someone who has a stake in your company, you can count on them for objectivity. This can not only improve business outcomes, but also reduce business owner stress, as they can trust unvarnished advice based on experience, rather than advocacy for specific strategies.
Do You Need To Hire A Fractional CFO?
Golub, Senitt, Rosenberg & Co provides fractional CFO services, controllership services, and the full suite of CPA services in order to fulfill the needs of growing businesses in and around Glendale, CA. We focus on fostering long-term relationships with our clients, looking towards your financial future, in addition to helping you with backwards-facing needs, like taxes and audits.
To learn more about the services we provide and what we can do for you as a fractional CFO, please don’t hesitate to contact us today.
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