What if I told you your bookkeeper wasn’t enough?

What if I told you, that to scale up your business, you have to scale up your finance department? Would that resonate?

For many of the SME organizations out there today, a bookkeeper or accountant might be enough.  After all, they can complete basic transactions and tax returns, but that’s thinking small.

-      You need to look into the future of your business

-      You need to make decisions on the direction you take

-      You need to plan based on the reality of your current state

-      You need someone to be prepared with reports that motivate investors

-      You need someone to keep your stakeholders informed on key financial indicators 

For the average business owner, this can be a daunting task. But, it doesn’t have to be.

Hiring a Fractional CFO could save you money, both in the short, and long term by giving you access to expert financial guidance, at a fraction of the cost.

As a business owner, you need to know that you have access to financial expertise, any time you need it, but without breaking the bank in the process. We’re going to explore a few reasons why a FractionalCFO might just be the answer you need, for your business.

What is a Fractional CFO?

To understand the role of a Fractional CFO, you must first understand the role of a CFO in general. Many of you reading maybe familiar, but for the sake of keeping everyone on the same page, we offer the following brief synopsis, describing the role.

Role of a CFO

In many large organizations, there is a CFO who is responsible for much of the high-level financial functions such as

-      budgeting: management of financial assets and debts

-      forecasting: strategic management and direction

-      cash management: management of cash flow& reporting

-      financial controls: risk management

-      investor relations: increasing the value of the business

The need for these key functions evolves as the company grows and you need a key person to manage that process of change; enter the CFO.

Role of a Fractional CFO

This is the great part: not only do you gain access to the financial expertise outlined above, but you get it on your terms and at a cost that fits your business.

A Fractional CFO can help with:

-      Cash flow management

-      Financial forecasts and scenarios

-      Sales projections

-      Alignment of budget to short-and long-term business goals

-      Creation of stakeholder reporting

-      Creation of clear business strategy, with KPI reporting

And they can handle much more, at minimal cost to you.

How can they afford to do that you ask? Their expertise tied with systems, processes and software that equip them to deliver mission-critical information with incredible efficiency.

Benefits of Hiring a Fractional CFO?

Really, there are many reasons hiring a Fractional CFO could work for your SME; here are a few reasons that resonate the most with us.

Improved Decision-Making

It goes without saying that to make an informed decision, you need all the facts. This is a great example of what a FractionalCFO can offer. Knowing you have expert guidance and insight for your financial planning, you gain peace of mind in knowing you can make the best, most strategic moves for your business. Insights from an expert could mean the difference between wishing and accomplishing, the value-added growth your business needs.

Improved Financial Planning

A Fractional CFO can offer expert advice on your future plans, based on budget and projection analyses.  They bring to the table, all of the knowledge needed to support your business’s financial strategy, and can provide detailed plans you can easily implement.

Company Cost Savings

The most obvious reason an SME may choose to go the route of hiring a Fractional CFO has to do with cost savings. Many businesses are just starting up, and while they still need the expertise of a financial expert, they can’t afford the cost to bring one on board full-time. The appointment of a Fractional CFO gives you the benefit of financial horsepower without the high cost.

Transition Solution

A typical reason to hire a Fractional CFO involves those businesses that are going through a transition period. Maybe you are preparing your business to present for sale, or you need to prepare for a financial audit; a Fractional CFO can ensure your books are spotless and complete and that your budgets are on track and aligned with your organization’s growth needs.

Better Market Perspective

When hiring a Fractional CFO, the most obvious choice is going to be someone who is experienced in the field. Often this brings with it an innate knowledge and perspective from their work with others in the same industry or in diverse industries. This breadth of knowledge offers a new perspective on where you stand in the current market and strategies to improve your positioning, if necessary.

Time/Resource Savings

Another benefit to hiring a Fractional CFO is the resource and time savings it offers. Many Fractional CFOs work remotely, and only work when needed, allowing for more efficient use of resources.Additionally, Fractional CFO will likely be more focused on the individual tasks at hand, since they will not have to deal with day-to-day interruptions that come with traditional office-based employees.

Streamlined Operations

Mainly because of their expertise and acumen in the field, Fractional CFOs can help streamline your business’s financial operations; offering solutions to cut spending or run more efficiently. Overall, the expertise of a CFO on board is invaluable for important decisions like how to operate more efficiently and how to reduce unnecessary spending. Timely insights like these could save you money and frustration in the future.

Better Internal Controls

While you may have a person, or a whole team, managing your finances, a Fractional CFO can provide better high-level oversight. This gives them the right perspective to help protect company assets and flag potential fraud risks. In many cases they are able to set up internal controls, or checks and balances, that, when implemented, keep your business running stress-free.

Growth Support

A Fractional CFO can be an immeasurable asset for companies looking to expand or pivot their growth strategies. They can:

·      help integrate new tools or help navigate regulatory changes

·      review and streamline the bookkeeping processes, to make them more efficient

·      be instrumental in obtaining new funding or investors

·      create a scalable financial framework that is easy to implement and maintain

·      offer guidance on sustainable growth models

Flexibility

Probably one of the biggest benefits of hiring a Fractional CFO has to do with the flexibility of their support. You can choose when their services are needed and when they are not. The flexibility of usage, helps you better budget allocation of their resources to make the biggest impact.

How to Choose a Fractional CFO

Now that you have a good view of the benefits you may want to engage CFO services for your small business. How do you decide which one is right for your business?

Choosing the Best Match

Depending on your industry, you may need the expertise of a Fractional CFO that also has knowledge in manufacturing, distribution or even real estate. More straight-forward SMEs need a FractionalCFO that can handle things like:

·     brand expansion

·     go-to-market strategies

·     international growth/subsidiaries

·     mergers & acquisitions

When narrowing down your choice, keep in mind you will also need to utilize the person in this position as a form of advisor to leadership, so they will need to work well within your current leadership team and staff, as well as your overall corporate culture.

When it comes to the more tertiary skills, look for someone with clear communication skills and a strong leadership style that fits with your organizations culture. 

Bottom Line

Deciding to bring on a CFO for a full-time position, is a serious business decision that can help your SME grow. However, if your organization is going through a transition, or isn’t quite ready to take the plunge into the deep end, a Fractional CFO is a great option.

By leveraging the flexibility and value of a Fractional CFO, you can position your company for growth, both today and the foreseeable future. No need to break the bank. Enjoy the expertise of a CFO, for a fraction of the cost.

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