7 Ways to Use Fractional CFO Services to Your Advantage

Rather than paying for a full-time employee or going without this much needed position, there is an option in between. A CFO (Chief Financial officer) is a senior executive who is responsible for managing and overseeing the financial wellbeing of a company. Their scope of responsibilities is tailored more to the specific goals of a small business, and they usually take on fewer tasks than a full-time CFO. A significant external funding event can signal the point where a business requires a finance professional to oversee the team and provide more forward-looking guidance to the increasing range of stakeholders at hand.

As a founder you are probably going to be on your own when raising angel investment or pre seed and seed rounds of investment. At that point you need to have some level of sophistication, and probably shouldn’t be trying to wing it as a founder on your own. As such, we can help you create meaningful dashboards and scorecards for your business, analyzing performance against key performance indicators and other factors. Our profitability reporting and analysis tools will help drive business decision-making and provide insights into trends, predictions, results, and potential strategic direction moving forward.

What is a fractional CFO?

Individual efficiency and quality vary quite a bit, which affects your overall cost. Manufacturing, transportation, distribution, real estate and construction are very financially complex and require a specialty fractional CFO. SaaS, retail, and consulting services are simpler but still deserve an experienced professional. There are many more reasons to enlist fractional CFO services, so it’s best to discuss with an advisor, your board of directors, or a finance professional. Since the CFO is “fractional,” they offer their financial expertise part-time or as needed. Most fractional CFOs have at least several years of experience working as financial advisors/executives for other companies.

For instance, during the pandemic, Nauman Poonja, a fractional chief executive in Dallas, helped three clients facing insolvency renegotiate with vendors and find other sources of funds. You should also consider whether you want to pay hourly or project-based fees. Hourly fees will give you more flexibility in terms of how much you use the consultant, but project-based fees may be a better value if you have a specific goal you need help with.

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This is a common issue we see with founders who are fundraising or doing a more complicated transaction. Schedule a call with our team today and discover how Acuity’s fractional CFO services can be your roadmap to financial success. 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. Let’s say your company is struggling to stay afloat because your clients pay at different times.

• This can be helpful for businesses that are considering expansion or are in the process of making important decisions.
• It may be an opportunity to become more strategic instead of just crunching numbers.
• With growing investor relations and capital markets needs, hiring a full-time CFO becomes necessary to handle the responsibility.
• Let’s dive deeper into what fractional CFOs do and how fractional CFOs add value to your business.

They typically report to a CFO, but in some cases, the responsibilities of the position are combined, especially in smaller companies. While larger businesses can spread financial responsibilities around, small businesses tend to put more tasks on one person’s list. It often makes sense for ambitious companies to look for outside expertise to get their finances in order while they focus on building products and ramping up sales. Most fractional CFOs have served as a company CFO in the past, and many have a background in private equity or venture capital and have steered startups to successful exits. Now that so many companies have adjusted to working remotely, some are keeping fractional CFOs on longer.

Is Your Business Ready For A Fractional CFO?

However, they may be more expensive than hiring an individual freelancer. Individual freelancers may be more affordable, but you will need to research to make sure you find a reputable consultant. When Fractional CFOs looking for a fractional CFO, you should also consider the type of services they provide. Dr. Jordan CPA Services helps business owners make sound financial decisions without breaking the bank.

• If they charge an hourly rate, generally between $250 to $500, the total cost for a client will depend on the number of hours dedicated to that client.
• CFOs, after all, bring highly valuable skills to the table and expect reasonably commensurate compensation.
• Our experts can help you find the right solution for your budget and business needs.
• Perhaps the most significant benefit is that it allows businesses to harness the insights and expertise of a CFO without having to pay for a full-time employee.

Now you don’t really need an experienced CFO to do the formatting work in Excel and Powerpoint right? So can you sell the service for $1,000 per quarter to your clients while you personally only spend an hour reviewing the work that one of your staff accountants can put together for you? An interim CFO is just that—a CFO who fills in a staffing gap while you are in the hiring process for a new, full-time CFO.

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They can help startups present a compelling financial story to potential investors and navigate the complexities of equity financing or debt arrangements. The cost of a fractional CFO will vary depending on the type and size of business, as well as the number of hours worked. For smaller businesses, CFOs may charge an hourly rate of $75 per hour. For larger corporations, CFOs may charge an hourly https://quickbooks-payroll.org/ rate of $250 per hour. “We only accept the top 0.1% of finance talent into our network,” said Chase Hughes founder of the Pro Business Plans and the Fractional CFO network. “We thoroughly vet each CFO to ensure they have the skills, experience, and temperament to advise our members. We’re excited to have Hexagon Consulting Group on board and support their accelerated growth trajectory.”

A remote CFO may be like a full-time CFO, just working from elsewhere. Retail and food services sales rose 3% month over month in January, according to an S&P Global Market Intelligence analysis of U.S. Shoppers in the U.S. spent more than economists expected, estimating the figure to rise 1.7%. “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. The end of the fiscal year can be highly stressful for financial officers and corporate executives. The year-end closing procedure is time-consuming and sometimes brings unpleasant surprises.

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A fractional CFO can help your business stay compliant with relevant laws. Navigating the business world can often seem like an intimidating task, especially when it comes to securing the funds needed to grow your venture…. This can be done by conducting research online, asking for references, or even reaching out to their previous clients. Each week, Shiny receives 50 to 60 applications from people seeking fractional roles, he said, with only two to four new job openings on its platform. You might want to consider hiring a fractional CFO for several reasons.