Is It Time For A Fractional CFO?
A fractional CFO is a person who acts as a consultant to small- and medium-sized businesses. They are not full-time employees but provide professional services on an as-needed basis. The pros of hiring a fractional CFO are that they can save you money because they don’t require benefits or office space. Their cons include the lack of experience in managing finances for growing companies and the fact that there is no one person in charge when they leave your company.
Some tips for hiring a successful CFO:
Recruit and employ a fractional CFO that has experience managing finances for growing businesses.
Partner with them in their business to provide client mentoring, budget analysis, revenue forecasting, etc. as needed. This will allow you to save money on benefits and office space while still getting the expertise of an experienced finance manager who is familiar with your needs from day one.
Provide some training or guidance for the person before they start work so there is no time wasted learning how things are done at your company upon arrival outside of what you have communicated verbally or during a phone call interview process. Some tasks may include setting up accounting software on their computer system, getting a company credit card to make purchases on behalf of your business, or setting up the payroll system.
A Fractional CFO is an individual who specializes in financial management for small businesses before they become too large and require more experienced help, typically at that time when they have hired their first employee. This solution can be perfect for startup companies looking for some guidance from someone with experience managing finances without the commitment and overhead of a full-time partner with seniority status. A fractional CFO may cost less than hiring two people to work jointly as well— this includes salary plus benefits such as healthcare costs and retirement contributions