Why Every Company can Benefit from a CFO

As a business owner, you may be an expert at managing your business and your team, but how do you know when it’s time to hire a Chief Financial Officer (CFO)? Many companies choose to hire a bookkeeping or accounting team to keep their finances organized and make tax season a breeze, but a CFO provides several added benefits.

An experienced CFO is uniquely qualified to evaluate your company’s value and risks and communicate them to you and your investors in a clear and concise way. Your CFO can also tap into their years of experience to help develop strategies, not only for growth, but to protect your company’s vital assets.

Does your strategic plan necessitate acquisitions, loans, or public offerings? Your CFO can make introductions to the right professionals for your company and act as the lead negotiator during each step of the process. He or she can also strengthen the preparation of supporting documentation process and ease the overall flow of information between parties.

In the past, the downside to hiring an experienced CFO was the cost. Luckily, thanks to technological advancements and the ability to work remotely, outsourcing professionals is now a viable, efficient, and cost-effective option for many businesses. This is where a fractional CFO comes in.

What is a Fractional CFO?

A Fractional CFO is a contracted consultant who fills the role of CFO as needed. Unlike an in-house CFO, they are not employees of the company. The flexibility of a Fractional CFO provides many benefits, as they oversee and manage the company's financial operations—including financial planning and analysis, budgeting and forecasting, cash flow management, risk management, strategic planning, and investor relations—based on the specific needs of your business.

Why Outsource Your CFO?

One of the primary benefits of hiring a fractional CFO is the cost savings compared to employing a full-time CFO. Fractional CFOs work on a part-time, as needed basis or a specific project basis, which allows businesses to access high-level financial expertise without the regular, and typically expensive, overhead costs associated with a full-time executive-level position.

Fractional CFOs bring extensive experience and expertise in not only the core accounting, internal control and financial reporting processes, but also with financial management, strategic planning, and operational optimization. They have typically worked with multiple companies across various industries, providing them with a diverse set of skills and best practices, which can be invaluable for businesses seeking to improve their financial processes without making more costly and more permanent financial investments.

Another benefit of working with a fractional CFO is the fresh perspective they bring to the table. As an outsider to the organization, they can provide an objective and unbiased perspective on financial matters, which can be instrumental in driving positive change and fostering a culture of continuous improvement within the organization.

Hiring Process

The hiring process for a fractional CFO is similar to that of a traditional CFO. During the interview process, it’s important to ask about their background and experience, how your company will benefit from working together, how they will fit within the culture and environment within your company, how they will interact with your core leadership team and existing accounting team, what kind of reporting you can expect, and how often they plan to communicate with you.