Fractional CFO Services - What They Do For Growing Businesses

Any business adopts the basic model – invest in it, build it, and start making money. Organizations make capital investments to create value-added products or services and get paid in return. At its center, every business is just a cash-in, cash-out cycle. In case a certain part of this cycle goes wrong, the entire operation is disrupted.

The CFO (Chief Financial Officer) can then be deemed as the lifeblood of every business. They are responsible for maintaining the flow of money through the organization's operations and see it grow, evolve, and reach its goals. Both Startups and growing businesses, especially during infancy, generally operate without a full-time CFO. Because they do not have sufficient funds or revenue generation to bear the cost of an additional C-suite member. However, during the rapid scaling phase, capital raising or mergers and acquisitions, CFO expertise is required.

What is A Fractional CFO?

As the name indicates, a fractional CFO is a professional who provides Fractional CFO services to organizations on a part-time, contractual basis. Fractional CFOs boast of vast previous experience in a CFO level position. But they work with multiple organizations at the same time, as opposed to a traditional single company employee.

Diverging from full-time CFOs who are entrusted with all the associated responsibilities and get a salary, fractional CFOs operate as independent consultants. They offer flexible engagement models that can be scaled up or down with a company's needs.

A fractional CFO performs varied critical functions for growing organizations, such as:

Financial Management

This is the CFO's basic job role. As startups grow, their financial processes become too complex for the owners to handle with the help of an accountant. They need a capable person who can see the bigger picture through the nitty-gritty of financial reporting.

A fractional CFO can thoroughly analyze the numbers and statistics, establishing sound financial governance. To ensure that the reporting accuracy and accounting regulations are met without the expense of a full-time executive.

Strategy Fine-tuning

Businesses need money to run, so CFOs act as the financial gatekeepers. They are essential for formulating and optimizing strategy. A fractional CFO can give input on the financial viability of business strategies by bringing a non-partisan, quantitative-driven perspective.

Your fractional CFO can do a trial run of your strategy and determine if it's financially feasible. And if not, fine-tune the same to align with your business goals and financial reality.

Implement New Systems

Growth comes with the integration of more sophisticated financial systems and processes. This requires the guidance of an expert who has implemented several systems across varied scenarios. And has the capability to foresee potential issues.

The fractional CFO services bring this experience to ensure an effective implementation of new financial systems, without upsetting the already running workflows. In this way companies are able to expand their operations efficiently.

The Sum Up

To say in the end, with the increasing popularity of remote work and a preference for lean operational models, the demand for fractional CFOs continues to grow.