What is a Fractional CFO and Does My Company Need One?

For example, a start-up needs to establish strong accounting and reporting processes, appropriate KPIs, and so on to closely monitor progress. An older, midsize company might need help to prepare for an audit or complete a strategic analysis. Even a large company like Forbinde Hold might want to bring in specialized expertise to assist with a transition, a sale, an acquisition, or a specific project. It is essential to clearly understand your company’s financial status and outlook in order to operate efficiently and plan effectively. You can achieve that with the expertise a chief financial officer (CFO) brings to the table.

Probably the most obvious advantage is the ability to have a seasoned veteran on the team at a fraction of what it would cost to hire a full-time equivalent. Additionally, both the organization and the fractional CFO have the opportunity to initially work together on a limited scope and can get a sense of whether or not there is a good cultural fit for all involved. At TGG, we help small businesses get clear and accurate financial reporting as your outsourced partner. Our four-person teams come into your business to work with your existing team or serve as your entire accounting department and help your company thrive.

Secrets of a fractional CFO

A mistake in your books could result in bad decisions or even a lack of compliance. Great CFOs keep track of all the many moving parts of a startup’s financial operations, including budgets, cash flow, and performance metrics, making sure there is no mistake in any data or calculations. Many startups are run by entrepreneurs who may not have a background in finance. As a result, they may struggle to understand their true financial situation. Fractional CFO accounting services can help a startup make sense of its financial reports and provide the insights and guidance needed to make better business decisions. On the other hand, a full-time CFO is a professional who works for your business full-time and is available to work on your financial matters exclusively – this is one of the main advantages.

Most founders simply want the finance function of their startup handled by someone else, which is why they look into hiring a fractional CFO for their startup. If you already know exactly what your new CFO will handle, you can ask them for a price estimate and go off of that to determine their pay structure. Some fractional CFOs are sensitive to their hourly rate, while others are more interested in getting a monthly fee structure in place to give them more predictability in their income. As a startup, you also need to make sure you are getting the right output for your money.

Should I Sell My Company Now?

Within 90 days, I was able to fix some of the bottlenecks that were causing their financial and cash flow difficulties and resolved a good amount of the debt they were in. I worked alongside the owners of the practice as we navigated through these difficult times. The changes I suggested, along with giving them the time they needed to be fully implemented, allowed the practice to come out on the other side poised for success. Almost two decades later, I am happy to report that their practice remains on solid financial footing.

• Top fractional CFOs look beyond the numbers and see the bigger picture of how the startup’s financial decisions will impact its overall growth and success.
• Additionally, not having a dedicated CFO can prevent your business from accessing the financing and investment opportunities it needs to grow.
• It is easy to know if you need an interim CFO—your CFO left and you need a high-level “temp” to ensure nothing slips through the cracks while you search for a new permanent CFO.
• It is of particular importance when a business is in its growth stage that the growth be managed carefully, as growing at too quick of a pace can be risky to a business.
• Without Shiny, the process will look like a standard candidate hiring process, except it should be more rigorous.
• When building a robust accounting team, you may have questions regarding who to hire and whether to outsource talent instead of hiring internally.

Because of their blend of financial acumen and strategic insight, they can expertly parse the numbers being negotiated and help plan where the investment can take the business. There is no doubt that a Chief Financial Officer (CFO) is one of the most valuable assets of a company. Be it a blue chip company or a small business, every entity needs a skilled person to take care of its financials. In other words, sometimes, business owners are blinded to what they do not know but need to know. GrowthLab’s fractional CFO’S not only provide expert financial guidance, but also adapt to your business’s specific needs, allowing for a cost-effective solution. From strategic planning to tax services, our CFOs serve as trusted advisors who can help you make informed business decisions.

Want to speak to a fractional CFO?

“February’s data will be closely watched to determine the direction of consumer spending and the economy this year,” S&P Global Market Intelligence economists wrote. Whether you’d like to be a fractional CFO and stay with a company for a couple of months or years or be a permanent full-time finance chief, there’s no lack of opportunities as CFOs are in demand. The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever. On average, an ongoing relationship with a fractional CFO will cost between $6,000 and $12,000 a month.

Controllers are responsible for managing a company’s financial reports and overseeing internal financial controls. In contrast, CFOs have a broader scope, including managing the company’s financial strategy and analyzing financial data to make informed decisions. You may be unsure of the differences law firm bookkeeping between these varying roles on your accounting team. For example, Controllers and CFOs hold similar roles with a few key differences. As your business continues to grow, the ability to produce accurate, efficient financial statements will be increasingly essential to your success.