Fractional CFO Services: What You Need to Know

Many startup businesses look to fractional CFOs for assistance with their finances. Now there are lots of reasons why startup business owners might want the help of a fractional CFO, but one of the main reasons is that startup employees are often busy! They usually “wear many hats” and juggle lots of responsibilities. 

If you’re a startup business owner, consider lightening your load by handing your finances over to a fractional CFO. This allows you to devote your time and talents to other areas of the company. 

This change could also have a very positive effect on your business’s financial growth and success. Continue reading to learn more about fractional CFOs and decide if this service is right for you.

What Does a Fractional CFO Do? 

A fractional CFO is a person or team who handles the finances for a startup business and typically operates on a contractual or part-time basis. 

Fractional CFOs provide assistance with:

  • Budgeting and forecasting
  • Profitability analysis
  • Cash flow management
  • Improved decision-making. 

However, they can help with many other financial services that will benefit your business, as well.

How to Know When You Need a Fractional CFO

It can be hard for startup business owners to decide when they should keep jobs in-house and when they should outsource. Asking the following questions will help determine if a fractional CFO is right for you.

  1. Are you struggling to keep up with your bookkeeping and accounting?

If you already have efficient systems in place, but you struggle to keep your reports up to date, a fractional CFO would be very beneficial. This person can monitor your bookkeeping and accounting to help you keep things running smoothly.

  1. Are you about to experience some big changes?

Fractional CFOs are trained to help you make big decisions. If your startup anticipates major changes ahead, you might want to ask an outsider, like a fractional CFO, for his or her unbiased opinion. These professionals can use their knowledge and expertise to help you figure out the best decision for your business.

  1. Is your business growing?

If your business is growing, you need to be able to make informed decisions on how and where to spend your money. A fractional CFO will help you spend responsibly and make further improvements to your business.

  1. Do you want a better understanding of your financial data?

Business owners see accounting and bookkeeping reports all the time, but there are many other financial reports that can provide insight into your business. Let your fractional CFO teach you about more complex reports that involve topics like forecasting and profitability analysis. They can help you gain a better understanding of your finances, and suggest opportunities for growth and development.

  1. Are you taking on investors?

If your business is looking to receive funding or maybe you have acquired a big investor, you will need to provide detailed reports of how your business is doing. A fractional CFO will create these up-to-date financial reports, so you can feel confident when presenting this information to investors.

Benefits of Working with a Fractional CFO

  • Cost Savings
    • One of the most appealing benefits of a fractional CFO is the cost savings. If you hired an in-house CFO, you would have to pay this person a full salary plus benefits. Instead, a fractional CFO works part-time and allows you to only pay for what you need. 
  • Flexibility
    • Fractional CFOs can be flexible in the services they provide. Businesses can select to use services that fit their unique business needs. This flexible business model also allows you to only pay for the services you want and avoid wasting money on services that don’t benefit your business.
  • Expertise
  • Scalability
    • Your business will inevitably go through different seasons. In some phases of the business, you may need to talk to your CFO a lot. At other times, you might only need to check in with your CFO sporadically. Fractional CFOs can be scaled up or down depending on the needs of the business. 
  • Time Savings
    • Outsourced CFOs undoubtedly help businesses save time by taking care of financial tasks. Since they don’t have to worry about their finances, business owners can focus on other aspects of their business.

How to Find the Right Fractional CFO for Your Business

When looking for a fractional CFO, start by searching for professionals with experience in startups. After you have found a few candidates, make sure they fit within your price range. Then, try to arrange a meeting with him or her to see they could fit in well with your existing team.
Searching for a fractional CFO? Pasquesi Partners offers lots of financial services for startups. Schedule a meeting with us today!