At this point, you would be asking, what exactly is a fractional CFO? A fractional CFO is a qualified CFO expert who undertakes CFO functions for an organization on a flexible basis, as may be in a retainer or on a contract basis. There are numerous advantages of the fractional CFO which brings the same level of expertise and knowledge from a top range CFO to a business at a fraction of cost of having an in-house CFO who not only includes a hefty salary, but other fringe benefits like medical cover and other remunerations that may come with the position.
A full-time CFO not only implements but also manages all of the general financial strategy of a business organization, while an interim CFO serves the organization during the absence or search for a full-time CFO On the other hand, a fractional CFO deals mainly in projects that are more specialized in the company’s specific difficulties or objectives.
Fractional CFOs are hired by businesses to address and solve financial problems, scale up, enhance strategy, integrate systems, fund rounds, or manage audits or transactions. To employ a fractional CFO for startups or for any enterprise one has is a viable idea! Thus arises the concept of a fractional CFO. But why hire one? Fractional CFOs are hired by businesses to address and solve financial problems, scale up, enhance strategy, integrate systems, fund rounds, or manage audits or transactions. To employ a fractional CFO for startups or for any enterprise one has is a viable idea! Thus arises the concept of a fractional CFO. But why hire one?
Fractional CFOs are typically engaged when an organization needs a strategic intervention or skilled solutions to its financial problems that its internal staff may either lack the expertise or numbers to address. Sometimes, it is entirely possible for an organization to lack a full-time CFO for its operations. In other circumstances, however, the company may already have a CFO onboard and this fractional CFO works in a complementary or consultancy or dual role or oversees specific projects like funding or managerial review.
A fractional CFO is often brought into a company to help overcome specific financial challenges such as:
Fractional CFO services are also useful when expanding or when establishing more tactical and external organizational financial management. Though many bookkeepers, accountants, and controllers who work with current and past financial reports, tools, and data, a CFO looks forward.
As a fractional CFO, one ascertains how to get you from point A to point B, so to speak. In any form of business, management of funds is very crucial and especially when it comes to the expansion of the business. To many fractional CFOs, one of their significant value adds will be offering a financial analysis that will serve as a map to the increased growth in the way that is perfect, quickest, and most sustainable.
When taking a short-term outlook (next 3 months), mid-term outlook (this fiscal/calendar year), and long-term outlook (over the next 3-5 years), a company can see how its business is expected to progress and whether it will be cash rich or cash poor. They can be helpful in managing through the slowdowns, deciding when and how to approach the funding sources, from loans to equity investments, estimating future owner remunerations, and even in planning the future business steps such as staffing, production, expansion to new locations, etc.
Fractional CFOs are also good for growth and development of a business because the advice on how to increase revenues and profits are achieved optimally as the business expands. It includes altering the activities, assets, and partnerships that the business utilizes to generate product value for a steadily expanding and more heterogeneous customer base. In most organizations, this is referred to as ‘bridging the chasm’ because most firms begin experiencing declining margins and enhanced complications as their revenues expand beyond the tipping point.
Indeed, the kind of thinking that lead someone to start a business is typically untenable once a business is started regardless of how far along it is. This is because business organizations introduce new products and services into the market, expand the geographical areas of operation, open new outlets, carry out their operations in new currencies, and experience ever-increasing regulatory demands. All of these calls for further thoughts, equipment, and approaches.
According to Rita Multal, bootstrap startups often lack formal systems at the start; they may hire a part-time bookkeeper, for instance, but as the business grows and becomes more complicated, the infrastructure cannot handle any more orders. As a company evolves, systems, resources, processes, and strategies need to evolve with it to advance in complexity and value.
Fractional CFO services: This strategic component is all about attaining the established financial objectives and can be done effectively in the following ways:
A fractional CFO consultant is also engaged to come at a certain time to assist in achieving a given objective for instance considered in terms of capital fundraising, going for a sale, merger or acquisition. A vast majority of fractional CFOs have been involved in sourcing hundreds of millions of dollars of various debt and equity financing for several companies and contributing to other merger and acquisition activities. Of course, they work for your future not the now, though this is not always true, there are certain jobs which start giving you the returns immediately you begin.
In these cases, a fractional CFO is helpful by:
Preferred CFO has been operating in the outsourcing and fractional CFO services market for more than ten years. The founder and the managing partner of Preferred CFO is Jerry Vance, who among other fractional CFO consultants is among the most experienced in the United States. He has a select group of namely experienced CFOs that he selected himself with all the right credentials needed for an elite fractional CFO team. If you would like to speak with a CFO today, please feel free to call at 801-804-5800 or use our Contact Us form.
