What Is a Fractional CFO? 4 Key Benefits of Hiring One

As your business grows, you need someone to help keep up with the changing financial landscape. Growth means more transactions, additional expenses to keep up with production scaling, and more. Close the books 4x faster, collect over 95% of receipts on time, and get 100% visibility over company spending.

• The amount of financial data companies require, and track can be overwhelming.
• A fractional CFO can provide specialized financial services to help you reach your goals.
• By revisiting contracts and aiming to reduce costs, often targeting a reduction of up to 20%, a fractional CFO can drive immediate cash savings.
• While unique in their fractional capacity, fractional CFOs are highly invested in the ins and outs of the companies that engage their services.
• It may be necessary to have an interim figure to keep the business on an even keel and start implementing new strategies.
• Instead, they simply provide financial oversight and assist with managing financial reporting requirements until a permanent replacement comes on board.

For example, a CFO’s input might drive marketing campaign spending or streamline manufacturing through capital expenditure recommendations – roles you’d largely expect to fall solely within the CMO or COO offices. Startups and bigger enterprises can tap into the financial leadership of fractional CFOs without incurring the costs of a full-time hire. Many companies are turning to fractional CFOs to mentor their internal finance and accounting teams, especially in smaller organizations where in-house expertise may be limited. They don’t just oversee finances but delve deep, ensuring every facet is scrutinized for decision-making. When venturing into mergers or acquisitions without expert financial guidance, companies can risk overpaying, miss potential liabilities, or fail to realize the projected synergies.

Navigate an audit or transaction

They adapt their services to meet your business’s changing needs, providing the right level of support at the right time. In today’s dynamic business landscape, you’ve likely heard the term “fractional CFO” thrown around, but what does it actually mean for you and your business? A fractional CFO is essentially a chief financial officer who works on a part-time or contractual basis instead of being a full-time employee. This model offers flexibility and access to experienced financial professionals without the hefty salary commitment of a traditional CFO. The fractional CFO must be able to perform at that level with CEO team partnership. Fractional CFOs must contribute to the financial strategy and business profitability, think strategically, and provide decision-making support based on financial analysis.

But what sets them apart is the part-time nature of their engagement and their versatility to work with multiple organizations simultaneously. Often, these fractional CFOs collaborate with multiple startups at a time, as opposed to full-time what does fractional cfo mean CFOs — who commit to one company — enjoying all the benefits and obligations of such a position. But here’s where our fractional CFO services come in handy, since you can get all the expertise you need, but on a part-time basis.

Toptal Finance Experts

“An advantage is that you can kind of stay above the fray of office politics because you’re an outsider,” DeGolier says. Working as a fractional CFO, he didn’t have the same trepidation as a full-time permanent C-suite leader, he explains. There’s less fear “you’re going to lose your job and be unemployed after it’s over because you’ve got multiple clients,” he says. They’re early adopters of financial software and tools, always on the lookout for ways to leverage technology to streamline processes and gain insights.

12 Things Investors Look for in an Investment Opportunity Being funded by a VC fund has been glamorized in the past 10 years—and it’s no wonder why. Venture capitalists not only provide funding for young and innovative businesses, but also bring a partnership with… Profitability is not just a financial metric; it’s a mindset that should permeate your business operations. By prioritizing profitability, you can grow your startup into a financially stable and sustainable business that can weather economic challenges and thrive in the long term.

Is Your Business Ready For A Fractional CFO?

A fractional CFO can weigh in on the financial side of strategy by bringing in a perspective based on the numbers. Still, many startups might be hesitant to take on the additional cost of a C-suite colleague, especially when the situation necessitating the presence of a CFO is transitory. CFOs, after all, bring highly valuable skills to the table and expect reasonably commensurate compensation. Audits can be unnerving for business owners to go through and having an expert to advise and assist you during an audit can be beneficial. CFOs can take over that function for you and answer questions the auditors may be asking.

Our CFOs adapt to your business’s specific needs – they don’t have a one-size-fits-all approach. And even if you lowered your cost to $2,500 per month, you’d still bag a professional who’s knee-deep in your business almost every week. For example, Acuity’s fractional CFOs have been instrumental in helping startups raise the funds they need to grow.