When a business is in its infancy, the owner usually does it all, including managing the finances and planning for the future. However, there comes a point in that business’ growth where the entrepreneur needs the input and expertise a Chief Financial Officer (CFO) would offer.
For many small businesses, spending a full salary along with bonuses and benefits isn’t feasible. At that point, the business’ best option is to hire a Fractional CFO.
A Fractional CFO vs. a Full-Time CFO
When a company hires a full-time CFO, this person serves in an executive role and is the person most responsible for that company’s financial health. They make predictions and forecast outcomes to make the most sound decisions. They help raise capital, oversee all accounting, and manage the cash flow. However, the salary for a C-Suite role like this can be substantial.
A Fractional CFO enters the company with comparable experience and expertise but provides services on a part-time basis. Fractional CFOs can be hired for a specific project, to solve a particular challenge, or to offer guidance when necessary. Instead of 40 hours a week, a Fractional CFO is typically available for around ten hours a week and completes some of the tasks a full-time CFO would usually do.
The Role of a Fractional CFO Within The Company
When you start work with a Fractional CFO, though they are not among company leadership, they play a pivotal role in setting your company up for success. They come in to help overcome any challenges and facilitate the company’s growth by:
- Overseeing accounting processes.
- Supervising the implementation of new systems as the company grows.
- Raising capital in order to expand the business.
- Assisting the company in navigating audits.
- Develop financial forecasts.
- Prepare for sales, mergers, and acquisitions.
As the business scales, it will face more challenges that are increasingly complex. Bringing in a Fractional CFO will enable the business to confidently navigate those problems and remain profitable.
How a Fractional CFO Can Benefit Your Business
When a business hires a Fractional CFO rather than a full-time CFO, it is often because the budget only allows for someone part-time. However, beyond saving money, a Fractional CFO is enormously beneficial. As an entrepreneur, you may have limited experience running the financial end of a business. A Fractional CFO will help you understand how your finances work and how best to utilize them in order to grow. You will be better able to analyze trends and make projections, which will aid in your decision-making skills when it comes to investments and taking steps forward.
Taking much of the financial side off of your plate also allows you to focus on the parts of your business you feel passionate about. That means more time to develop services and products, acquire more clients, and strengthen your processes.
Executive Financial Partners is able to set up your business with a professional financial manager that can take your business to the next level. If you would like to find out more information about Part-Time CFO services, reach out for a free consultation.
