4 Ways a Fractional CFO Supports Businesses

Financial growth is among the most important metrics organizations look to when reviewing and analyzing their business. Having a Chief Financial Officer (CFO) on your team is a critical aspect in supporting this process. A CFO will work with you to ensure that you and your leadership team have a solid understanding of your financial status and future opportunities. This can include identifying strengths and weaknesses, guiding decision-making, and more.

However, depending on the size of your business, hiring a senior financial leader may not be attainable. In this case, a part-time, outsourced, or fractional CFO is an excellent route to consider. Inside this blog, we’ll discuss the importance of having a Chief Financial Officer as well as the benefits of a fractional service over a full-time hire.

Why Hire a Fractional CFO?

When partnering with an outsourced Chief Financial Officer you get not only the expertise of a top-level executive, without the long-term commitment, but a multitude of other advantages that may not be as commonly thought of when considering this route.

These include:

  1. The ability to “test drive” a CFO: Ensure your new CFO fits within your company’s needs and culture without committing to a full-time hire.
  2. Avoid high recruitment costs: Save valuable time and money when you choose to work with a fractional partner who is already pre-screened for their skills, experience, and professionalism.
  3. Bypass the complexity of employee vs. vendor relationship: By utilizing an outsourced expert you’ll avoid the additional costs that come along with a permanent staff member including benefits, severances, training, equipment, and more.
  4. The ability to utilize expert team resources: Access the knowledge of your fractional CFO vendor’s entire team in addition to the individual CFO working with you.

What Support Will Your CFO Provide?

Insights into Financial Data

A Chief Financial Officer will have a deep understanding of your company’s financial statements and other financial data, allowing them to provide planning assistance and important observations that can help improve your bottom line.

This includes:

• Developing long-term financial plans: Including budget projections and forecasting future revenue.
• Improving cash flow: Provide detailed reports and recommendations that can help reduce costs and improve efficiency.

Better Decision Making

By offering expert insight and recommendations a part-time CFO will help to guide your company towards making evidence-backed financial decisions that are in line with your future goals and objectives. This can involve creating financial models and scenarios, analyzing data, and providing recommendations to decision-makers.

Reduced Risk

Identifying potential risks early can save frustration, headaches, and money. The experience a CFO offers will help identify these risks and develop strategies to mitigate them. This includes ensuring a company has the best strategic, financial, and operational response to any type of loss. They may work towards initiatives such as diversifying the company’s investments, creating contingency plans, and insurance.

Establish Relationships with Funding Sources and Lending Institutions

Having an expert to help your organization establish relationships with funding sources and lending institutions can have an incremental impact on future success. A CFO can negotiate better terms for your business and create a lucrative working relationship with lenders, which will help your organization if it needs to borrow money in the future.

Improve Business Agility

Lastly, organizations need to be able to respond quickly to changes in the market. Having an experienced financial partner on your team can help to ensure your business is at the forefront of upcoming market changes and continues to remain competitive. For example, if there is a sudden change in the economy, a CFO can help the company adapt its plans accordingly.

Hiring a Chief Financial Officer can provide your business with the insight and guidance it needs to achieve its long-term goals. By taking the time internally to identify your needs and objectives for future growth, you’ll be able to determine when the right time is for you to bring in a fractional CFO to work alongside your team.

If you are looking for an experienced team of financial experts who put their clients first, reach out to the team at Part Time CFO Services. Our team works directly with business owners to improve a company’s long-term financial health with part-time financial support. Contact Us