During the course of business formation, entrepreneurs may not truly understand the ins and outs of what it takes to set up, implement, and execute a long-term financial strategy. To scale growth effectively, businesses must have a rock-solid financial plan in place that allows rapid forward growth, without limitations.
Startups and small businesses often delay hiring a full-time CFO until they have reached a certain level of financial success, or have established confidence in the viability of their product and target market. Hiring a Fractional CFO is an excellent cost-effective option for SMEs, as they can retain access to the knowledge and expertise of an executive-level leader, without the high price tag of an in-house CFO.
The role of Fractional CFO goes well beyond budgeting, accounting, and financial reporting. It is important to recognize that this role is intricately intertwined in the long-term financial direction of an enterprise, and is a key player in ensuring continued growth, cash flow management, and efficient scalability of business operations.
A booming business is every entrepreneur’s or small business owner’s dream. But, with rapidly accelerating growth comes greater financial responsibility. With considerations such as increased payroll costs, greater overhead expenses, revenue collection, sales tax complexities, and future investment strategies, the days of winging it are over.
A Fractional CFO can work alongside your in-house accounting or finance professionals, whether you have one, two, or a full team, providing assistance in getting them up to speed financially and teaching them how to establish best practices.
Your Fractional CFO can also offer CFO advisory services to help identify the right mix of investments in human capital, working capital, and venture capital, while recommending cost-effective marketing, sales, or product launch strategies. A Fractional CFO understands where the best opportunities exist, and can provide the strategic and tactical advice your organization needs to go all in with calculated levels of risk.
##Benefits Of Hiring A Fractional CFO
A Fractional CFO lends their financial expertise, operational insights, and savvy business skills to ensure the longevity and viability of your organization’s financial future.
A Fractional CFO can provide essential financial support as follows:
Develop and implement long-term financial management strategies that accommodate for growth, yet align with current financial objectives.
Analyze and recommend areas where budgetary cuts can be made without compromising on long-term organizational goals.
Create proper product offering and pricing matrixes to increase profit margins.
Help mitigate financial risk across the enterprise.
Recommend emerging opportunities for products, market entry, or expanded service offerings, and analyze the feasibility of each.
Assess financial implications of mergers and acquisitions, and oversee the complex process of accounting reconciliation for multiple businesses.
Develop strategies to maximize cash availability, including implementation of reliable systems for debt servicing and vendor bill management.
Advise on utilizing lines of credit, and develop strategies to establish business credit history.
Establish enterprise-wide policies and procedures that will effectively guide business leadership, including senior executives, employees, and external partners.
Although services are tailored to fit the needs of your organization, below are the typical roles and responsibilities taken on by a Fractional CFO:
Assumes organizational leadership role, working directly with the CEO and other members of the senior management team to define and execute long-term financial management goals and strategic planning objectives.
Serves as key liaison to external partners, financial institutions, stakeholders, and investors.
Performs assessment of existing financial systems and assists in implementing technology upgrades, new accounting software systems, or task automation.
Serves as point of contact during financial audits, collecting essential documents, statements, reports, and other supporting paperwork.
Prepares and distributes annual financial reports to the Board of Directors, external stakeholders, and the general public, while fielding questions as necessary.
Develops and implements GAAP-compliant reporting standards and trains in-house staff accordingly.
Helps to execute procurement of capital from the most viable sources.
Leads vendor management processes, including sourcing and contract negotiations.
Helps identify and define organizational KPIs and KPMs.
Assesses long-term needs for human capital and helps define organizational roles to ensure optimal performance and productivity.