Fractional Chief Financial Officers (CFOs), also known as virtual CFOs, are becoming more popular for businesses to use. Chief Financial Officers are the most senior finance position of the organization, they oversee the finance department, and often are considered a trusted advisor to the Chief Executive Officer (CEO).
A fractional CFO is a fully qualified CFO who is available on a part time basis or on retainer. They can work virtually or in office, depending on your business needs. It’s vital to hire a CFO with the right qualifications that include a combination of a professional designation and a minimum of ten years of work experience.
When your business is growing quickly but you do not have a budget to hire a full time CFO, a fractional CFO might be what you need. It’s a cost-effective way to get the services that you need, and you can create a tailored plan to your specific business needs.
Here are a few ways that a fractional CFO can help you in your business:
1. Help with short term and long-term planning
Companies need to create financial plans for their business that offer direction and growth for the business. A CFO is well qualified in high level financial scenario analysis and can provide with diversified growth plans that will help you make smart business decisions.
2. Ensure a proper financial foundation is in place
The best preparation for the growth of a business is ensuring that your finances and financial foundation is in good order and can sustain the growth of the business. If the financial foundation is shaky while you are growing your business, you will be putting your business at financial risk unnecessarily.
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3. Help manage growth
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. A seasoned expert will guide you through the growth stage and ensure you have the capital to support the business through that stage.
4. Strategic financial planning and advice
If you are considering raising capital for your business or any other important project that requires financial advice, you need to solicit the expertise of a CFO. A CFO can help you identify your blind spots in your business and get you to consider different angles of an important investment decision that you need to make.
5. Provide audit support
Audits can be unnerving for business owners to go through and having an expert to advise and assist you during an audit can be beneficial. CFOs can take over that function for you and answer questions the auditors may be asking. Having a finance professional in charge of an audit helps the audit go smoothly with few issues.
The bottom line is a well experienced CFO will be a valuable asset to your team. It may be time to hire a fractional CFO when your current team members can no longer provide the financial guidance that you need. A CFO offers high level financial support and strategic advice.