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Need a CFO Without the Full Cost? A Fractional CFO Might Be the Answer

Are you a business owner or CEO facing one of the following scenarios in your company?

  • Your small or midsized business is trying to address financial and strategic obstacles, and you need senior-level help overcoming these business challenges.

  • Your growing business needs an expanding set of financial services that exceeds the skills of your existing team.

  • Your business is looking for highly skilled financial help with a specific project, such as raising capital, a potential acquisition, or implementing a new system.

  • You believe that your business has the opportunity to grow, but you need guidance and planning to implement your vision.

  • You require strategic advice to meet the long-term goals for your business.

  • While you need help addressing these challenges, you do not require a full-time Chief Financial Officer (CFO).

While you need help addressing these challenges, you do not require a full-time Chief Financial Officer (CFO). When a business finds itself in such a situation, a fractional CFO is a viable, cost-efficient solution.

What Is A Fractional CFO?

Fractional CFOs (sometimes called an “Outsourced CFO”) are experienced finance professionals who work with companies on a limited, hourly basis in a high-value, targeted manner. The duties of fractional CFOs are broad and can be personalized to the specific needs of a company, usually focused on the responsibilities that the existing financial team does not have the skills, experience or time to handle. Fractional or part-time CFOs are also well suited to assist with special projects.

Some of the many responsibilities you can have a fractional CFO take on include:

  • Oversight in closing the monthly books and managing financial reporting.

  • Mentoring and coaching your current accounting department.

  • Managing budgets and tactical operational recommendations.

  • Facilitating and executing strategic planning with key stakeholders.

  • Equity and debt fundraising logistics, advice and coordination, including preparing financial and due diligence materials.

  • Managing audit preparation.

  • Implementing strong internal controls and technical accounting rules.

  • Developing business plans, investor and board presentations and packages.

  • Analyzing cash flow risks and areas for improvement.

  • Evaluating contracts and negotiating with customers, vendors and banks.

  • Analyzing cost and reorganization support.

  • Coordinating outside vendors (banks, leasing companies, insurance, tax preparers, etc.).

Having a fractional CFO working with your business can give you the best of both worlds: needed skills without the costs of hiring a full-time C-level employee, such as salary, bonuses and benefits. Fractional CFOs typically have years of experience so they can quickly get up to speed and begin effectively tackling your problems and implementing solutions.

A CFO’s role is focused on strategy. A fractional CFO will help your company move beyond just keeping your current financials in order by helping plan and position you for a strong future.

If you have a strategic special project, such as an M&A activity, a fractional CFO can work with your current team to take on the additional duties.

The unique aspects and nuances of your industry may require specialized knowledge. Many outsourced CFOs choose to have a specific industry focus, allowing you access to a sophisticated knowledge base and industry relationships that you otherwise might not be able to tap into or afford.

Some companies see mentoring current staff members as an important role for a CFO. With years of experience, fractional CFOs can make good mentors and trainers. In fact, many seek out fractional positions for the opportunity to work with teams to help develop their skills.

Making the Decision

This checklist will help you identify the variety of skills you should consider when hiring a fractional CFO:

  • Does this CFO have experience in your industry and desired results (raising money, selling a company, M&A transactions, startup experience, etc.)?

  • Is this someone you’d like to work with?

  • Are they a good communicator?

  • Would they fit in well with your existing teams, strategic partners and firm culture?

  • Are they a “hands-on, roll up your sleeves” CFO, but also with a mix strategic skills? Does their style match what you need?

Fractional CFOs can provide you with the specific services you require, no matter what opportunities or challenges your business is facing. If you’re searching for a fractional CFO, the list above provides a good starting point when assessing a candidate.

If you are a business owner or CEO within the San Francisco Bay Area or Silicon Valley, in need of an experienced part-time CFO to help your company identify opportunity and navigate the economic landscape, improve cash flow, accounting and billing process management, as well as profit margins, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.

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