Are you looking for a C-Level financial consultant without the burden of hiring one full-time? A Fractional CFO, also known as a virtual CFO or start-up CEO, can be hired on a project basis to help companies achieve a myriad of tasks along their strategic path.
These part-time and often remote CFOs have a sophisticated level of industry knowledge and experience, perfectly positioning them to execute high-level strategic plans that propel executives and their teams toward their long-term goals.
CEOs might consider hiring a Fractional CFO as a core team leader who can leverage their experience and connections to manage big projects and help businesses along their path to achieving important milestones, such as:
- Funding rounds
- Acquisitions
- Divestitures
- Key partnerships
- Financial reporting
- Compliance
- Overall financial department oversight
Since Fractional CFOs are hired as external contractors, they can inject valuable new perspectives and resources into organizations that can make it easier for companies to identify new areas of growth and execute on existing opportunities.
In this article, we’ll break down some of the most alluring qualities of a Fractional CFO.
What Is Accounting Automation Software?
There’s never a bad time to consider hiring a Fractional CFO, however there are particular times when a part-time finance expert can accelerate a company’s goals more than others. Here are a few signs that you may be ready:
- Your business needs a trusted figurehead over its accounting department to make sure that it’s in full compliance with regulations
- Unlocking efficiencies in your accounting process will help you execute on opportunities that you didn’t know existed
- Budgeting and forecasting would help your company align its cash flow around capital-intensive projects
- You recently lost a CFO or critical financial manager and don’t have the time or budget to immediately fill their full-time role
- You need financial prowess to bring on new new investors and managing existing investor relationships
- You’d like to buy a company or divest an underperforming part of your business
- A new product launch is on the horizon
A Fractional CFO can lend meaningfully to any of these efforts and more, helping small- and medium-sized companies realize new value from their enterprise at all stages of growth and development.
Benefits of Hiring a Fractional CFO Vs. Full Time
When hiring a start-up CFO, companies are able to access vast industry experience at a fraction of the cost of hiring a full-time CFO, a role that typically requires all the bells and whistles of expensive salary and benefits packages.
Since these financial experts can be hired on a project basis, companies can either nurture their partnership with a trusted financial professional to execute on a spectrum of tasks, or pick and choose different people for different projects in order to maximize their various skills, expertise and connections at strategic times.
One type of virtual CFO might be able to open up new doors for a company through their already extensive industry knowledge and network, while another might excel at accounting technology and spearhead an organization’s migration to cloud-based software.
Are You Ready for a Fractional CFO?
There’s never a bad time to consider hiring a Fractional CFO, however there are particular times when a part-time finance expert can accelerate a company’s goals more than others. Here are a few signs that you may be ready:
- Your business needs a trusted figurehead over its accounting department to make sure that it’s in full compliance with regulations
- Unlocking efficiencies in your accounting process will help you execute on opportunities that you didn’t know existed
- Budgeting and forecasting would help your company align its cash flow around capital-intensive projects
- You recently lost a CFO or critical financial manager and don’t have the time or budget to immediately fill their full-time role
- You need financial prowess to bring on new new investors and managing existing investor relationships
- You’d like to buy a company or divest an underperforming part of your business
- A new product launch is on the horizon
A Fractional CFO can lend meaningfully to any of these efforts and more, helping small- and medium-sized companies realize new value from their enterprise at all stages of growth and development.
Benefits of Hiring a Fractional CFO Vs. Full Time
When hiring a start-up CFO, companies are able to access vast industry experience at a fraction of the cost of hiring a full-time CFO, a role that typically requires all the bells and whistles of expensive salary and benefits packages.
Since these financial experts can be hired on a project basis, companies can either nurture their partnership with a trusted financial professional to execute on a spectrum of tasks, or pick and choose different people for different projects in order to maximize their various skills, expertise and connections at strategic times.
One type of virtual CFO might be able to open up new doors for a company through their already extensive industry knowledge and network, while another might excel at accounting technology and spearhead an organization’s migration to cloud-based software.
Typical Fractional CFO Responsibilities
There are endless possibilities to hiring a CFO part time since their breadth of experience can aid companies through multiple challenges and goals. As a top-level strategist, they can consult on key business development plans. They can manage relationships with key business stakeholders and spearhead key financing initiatives.
Internally, they can manage day-to-day tasks and conduct wide-scale industry research and analysis on internal processes designed to improve financial transparency and efficiency. They can oversee and revamp finance departments, audit and repair financial statements, regulate liabilities and improve cash flow. They can increase profitability within individual projects to enhance overall project management and performance.
Is a Fractional CFO Worth The Investment?
Since poor cash flow management is the culprit for an estimated 82% of business failures, a CFO can serve as a crucial ally and partner for founding entrepreneurs who might not have the experience to adequately manage business finances. These C-Level allies have the vision and adequacy to keep smaller and newer businesses grounded. They are also highly skilled at business leadership, management and communication, which injects a fresh level of professionalism that can meaningfully serve newer CEOs and founders as they navigate a landscape of new challenges.
Since startups tend to have smaller teams that are firing on all cylinders, it can be advantageous to hire a CFO who can alleviate some of these responsibilities from the team working on core initiatives. A Fractional CFO can help ensure that due diligence is given to overall financial management and accounting so that business leadership can focus on their strengths to propel the company forward.
How Much Does a Fractional CFO Cost?
Fractional CFOs can cost as low as $2,500 per month to as high as $10,000 per month, depending on the comprehensiveness of services provided, the amount of work they’re putting in, and the extensiveness of their network and experience.
Costs vary based on the needs of individual companies, tasks and projects. Some companies might have the demand and budget to hire a CFO for a demanding workload, while others will require fewer hours per month.
The average salary of a full-time CFO can be tens of thousands of dollars more than the cost of hiring one on a project basis. Even the highest Fractional CFO costs are likely to still be under the national average of a full-time hire.
With the right part-time CFO set-up, small businesses can get critical financial partnership without fielding the unmanageable costs of an internal C-Level hire.
Why Fractional CFOs & Accounting Technologies Are a Perfect Combo
Accounting technologies have quickly become a favorite tool of financial professionals because of the transparency they provide to operational processes. Business technologies like these are powerful tools when used by a person savvy with their capabilities and intimate with corporate finance. Comprehensive overall accounting platforms, such as QuickBooks and Sage Intacct, help CFOs manage numbers and conduct deep dive analysis and forecasting to surface strategic growth and planning initiatives.
A Fractional CFO can spearhead a business’s migration to new cloud-based technologies and create customized workflows and dashboards. They can then use this system to save the company time and money by streamlining operational processes. Through a technology such as Expensify, for example, companies can easily track corporate and employee expenses, then integrate data as it changes in real time with the overall company ledger.
With QuickBooks Budgets, Financial CFOs can conduct visionary forecasting based on in-the-moment spending behaviors. This helps business owners glean insights into how their hard-earned money is flowing into, through, and out of the organization. Generally speaking, financial CFOs provide data-backed perspectives on the financial health of the organization, and whether cash flow is aligning with broad goals and priorities.
Fractional CFO for Law Firms
Law firms with CFOs tend to improve their bottom lines and expand margins, driving gains for partners. Studies have shown that the vast majority of large law firms that employ CFOs see substantial revenue increases. As revenues rise, so do the profits per equity partner. In 2020, the biggest law firms with CFOs saw profits per equity partner increase by 13.4% to $2.23 million, according to an Am Law 100 report.
Smaller firms in a financial pinch can reap similar benefits by hiring a virtual CFO on an as-needed basis at a sliver of the cost.
How to Find and Hire a Fractional CFO
In order to successfully begin a search for a Fractional CFO, outline your business needs to get a solid grasp on the kinds of attributes and experience levels you require in a trusted financial partner.
Do you need someone who is savvy as a bookkeeper and department manager or a person with broad industry connections and strategy experience? Do you need someone for just a few hours or could you benefit from having someone on a more consistent part-time basis. These answers will vary at each stage of your growth.
A Team’s Fractional CFO Services
The A Team makes hiring a customized Fractional CFO easy. Our versatile team of financial professionals can be hired on an as-needed basis to help your organization execute on a variety of projects, tasks and milestones. Discover your unique strategy and define your budgetary requirements with an A Team Consultant, and we’ll match you with the best candidates based on your unique needs.
Would you like to learn more? Reach out today to get started.
