An Introduction: What Are Fractional CFO Services?
Fractional CFO services are helpful for businesses looking for additional support with their financial operations. A fractional chief financial officer will provide financial advisory support to a business on a contractual basis. The fractional CFO works as a contract employee who provides freelance analysis and reporting for your business without requiring a long-term commitment.
Who Needs Fractional CFO Services?
Fractional CFO services can work well for startups who need financial advisory support but don’t want to pay for a full-time CFO. You can tell you require fractional CFO support if you meet these points:
- You don’t have the budget to hire a full-time CFO who might require an annual salary of $300,000 or more.
- You need assistance reviewing your financial reports.
- Your business requires help managing various financial tasks, including paying bills and producing investor reports.
- Groups looking to expand can also benefit from a fractional CFO.
What Are the Benefits of Hiring a Fractional CFO?
There are many positives that come with hiring a fractional CFO:
- The extensive knowledge a fractional CFO will provide to your business can help you make more out of your work.
- Your CFO can also establish best practices for your business to follow.
- Since your fractional CFO is a part-time employee, you won’t spend as much on that worker.
- Since you have an outside person work as your CFO, you will have more time to manage many tasks you’re trying to complete.
- You can contact a fractional CFO online, or you can have that person come to your site. The worker’s flexibility makes it easy for you to use one’s services.
What Are Fractional CFO Services?
Financial Planning and Analysis
When looking for a fractional CFO, you’ll need to understand what are the fractional CFO services you can utilize. The first of these functions entails financial planning. Your CFO can analyze your business operations and identify suitable plans for your business, including looking at what is working versus what needs fixing.
You can get new financial models from a fractional CFO. These models help review the feasibility of different tasks while identifying how your finances might change based on new operations. The planning can also include reviewing historical and current cash flow data to help you create anticipated projections surrounding your work.
Budgeting and Forecasting
Another of the fractional CFO services you can hire entails having a CFO help you establish a suitable budget. Startups will require help planning operations to meet revenue and expense goals. A business can make more educated decisions after a CFO establishes a new budget.
Further forecasting can also work when you have a CFO ready to help. Forecasting entails reviewing prospective financial performance based on historical data and anticipated market and economic operations. The analysis process will help you identify changes you can utilize.
Financial Reporting
Your financial reports can include many things, including cash flow analysis reports, financial models, and cost accounting points. Financial reports can be complex and require plenty of analysis, so having a fractional CFO on hand to help you with a review will be essential to your success.
Tax Planning and Compliance
In addition to filing taxes, your business has to comply with all relevant tax standards. Your fractional CFO can help you complete your tax reports and review all accounting info to ensure accuracy and compliance. Your CFO can also help you identify tax benefits your business might utilize. Simplifying your tax plans is necessary for helping your business stay intact.
M&A Advisory
The best fractional CFO services will also provide merger and acquisition support. M&A advisory plans are necessary for businesses trying to grow, as the M&A process entails reviewing assets and divisions and helping make a company more viable to a prospective buyer. Your CFO will review your M&A effort and provide guidance on how to divest or acquire various assets or divisions.
Investor Relations
Your CFO can also interact with your business investors. Your CFO will prepare different analysis reports on your business and communicate to your investors. The work your CFO puts in here is necessary when you’re looking to bring in new investors or maintain any older ones.
How to Choose the Best Fractional CFO Service
What To Look For In a Fractional CFO
You will find many choices for a fractional CFO, but not all are alike. You can use a few points to help you find a useful fractional CFO:
- Look at the experience a CFO has with startups.
- Check their service expertise, including how well someone can handle strategic planning and modeling functions.
- All CFOs have experience in different industries or sectors. See if a fractional CFO can work in your field.
- See what processes a CFO uses when completing tasks and if those practices are worthwhile for your business.
Interviewing Fractional CFOs
Hiring the best fractional CFO service can be challenging if you don’t know what to ask during an interview. You can ask a prospective CFO a few questions during your interview to see if that one is a worthwhile choice:
- What sectors do you work in the most?
- How do you review the financial value of a company or various operations?
- What knowledge do you have of our company?
- What responsibilities have you held in the past, and how have they helped you prepare for work?
- Are you capable of managing various leadership operations?
- How can you balance different tasks? This work includes figuring out which functions are the most essential to follow at a time.
Conclusion
Fractional CFO services can help you manage your operational activities a little better, as you’re keeping your finances in order. Your CFO will assist you in finding financial plans that fit your business. But it’s also essential to see how you choose the best fractional CFO service for your work plans.
Make sure when finding a fractional CFO that you use one that will help you with all your specific financial tasks. Look at how well someone can assist you with different tasks of value. See how that CFO can manage your industry, and see what priorities someone can utilize for operations. You can contact us at the CapCompass for further details on how well fractional CFO services can work for you. Talk with us to learn more about how to get a fractional CFO ready for your work needs.