Along with many positives, hiring fractional CFOs also has some downsides when compared to hiring a full-time CFO. They can offer new ideas and solutions that you may not have thought of before. There are several benefits that come with using an outsourced CFO when compared with a traditional CFO’s role. Fractional CFO services will also include various other fundraising activities and a strong focus on investor relations. Our CFOs adapt to your business’s specific needs – they don’t have a one-size-fits-all approach. And even if you lowered your cost to $2,500 per month, you’d still bag a professional who’s knee-deep in your business almost every week.

• Recently, this tactic has become very popular in the startup ecosystem because it’s simply a smart financial and operational move.
• Amplēo provides business professionals, such as CFOs, CMOs, and CHROs, on a fractional basis in order to help organizations achieve their full potential.
• You’ll gain a mutual understanding of what fractional CFO means and how much the financial services cost based on your business needs.
• This offers a company the experience and expertise of a high-end CFO without the in-house cost—salary, benefits, and bonuses—of a full-time CFO.
• A CFO can help you identify your blind spots in your business and get you to consider different angles of an important investment decision that you need to make.
• Scaling up or down is a lot easier, especially if you set minimum and maximum hours within the contract.Overall, a contracted fractional CFO generally comes with less hassle.

This way they ensure that your existing financial practices meet the established standards and successfully pass external and internal reviews. By understanding tax opportunities and collaborating with Certified Public Accountants (CPAs), a fractional CFO can implement what does fractional cfo mean the right strategies and identify often-overlooked tax benefits. A financial forecast and budget can help your stakeholders make informed decisions. For example, they may implement a new approval workflow for expenditure requests to ensure better control over spending.

Enhance Tax Strategy and Compliance

Meaning they aren’t full-time, and they only provide the exact hours required to fulfill your specific needs. Even if you don’t have 40 hours worth of work per week to give a full-time employee, you’re still paying them their full salary, vacation time and benefits. It is common during leveraged buyout (LBO) processes to change the companies’ management structure. A CFO may resign during these times, or investors may look to start a clean slate and appoint their chosen figurehead.

We know financial stuff can be a bit complex, so we’ll keep it straightforward. So, say you run a subscription-based business, and too many customers are canceling. A fractional CFO could dig into the data, uncover the root of the problem, and suggest strategic ways to improve customer retention. If you’re trying to raise money for your startup, a fractional CFO can really help. They know how to navigate the world of funding, they can help you make a great pitch, and they can even talk terms for you.

Measuring the Impact: Is Hiring a Fractional CFO Role Worth It?

“An advantage is that you can kind of stay above the fray of office politics because you’re an outsider,” DeGolier says. Working as a fractional CFO, he didn’t have the same trepidation as a full-time permanent C-suite leader, he explains. There’s less fear “you’re going to lose your job and be unemployed after it’s over because you’ve got multiple clients,” he says. Jay Jung, the founder of Embarc Advisors, says he’s “always been an entrepreneur at heart” and works with startups as a fractional CFO and advises some as a consultant. “Ideally, a fractional CFO should work with other management team members to drive strategy, not just closing the books and providing management reports,” says Jung, a Goldman Sachs and McKinsey alum.

With a service, you gain an entire team of financial and accounting professionals, all of whom support the CFO role. This division of duties can make a fractional CFO service an affordable one-stop shop for replacing an in-house accounting team. These costs may mean you end up overpaying for a full-time CFO instead of hiring a fractional CFO. Startups and bigger enterprises can tap into the financial leadership of fractional CFOs without incurring the costs of a full-time hire. They will use financial data to set goals and create the blueprint to achieve them. With the company’s vision in mind, they’ll assess its financial position, and identify opportunities and threats in the market.

What Is A Fractional CFO? A Guide For Business Owners

The amount of financial data companies require, and track can be overwhelming. Instead of getting lost in the numbers, you can focus on making data-backed decisions based on what your fractional CFO provides. CFOs focus on financial operations, management, and strategic planning to aid founders in decision-making. At many companies, a CFO is a full-time, salaried employee, working solely on advising one business. A fractional CFO engagement may begin with the completion of a financial scorecard to benchmark the finance organization’s health. From here, a good fractional CFO service should support in creating KPIs and a roadmap to work towards that aligns with overall business goals.

• Fractional CFOs with M&A experience can be trusted advisors to provide strategic planning and financial insights to maximize the value of the business ready for exit and ensure a smooth transition.
• Is your company ready for a financial point person, but you’re not sure if you can afford a full-time chief financial officer (CFO)?
• Whether you’d like to be a fractional CFO and stay with a company for a couple of months or years or be a permanent full-time finance chief, there’s no lack of opportunities as CFOs are in demand.
• We shoulder all the sales and administrative tasks, both for you and our fractional CFOs.
• No severance package to figure out, no hard feelings, which bring us to the question of clientele.

Businesses invest capital and resources to create value-added products or provide services and receive payments in return. If one end of this cycle is affected, it’s only a matter of time before the entire cycle is destabilized. Consider the fractional CFO’s experience in your industry or similar sectors. Familiarity with the nuances and challenges of your specific industry can greatly benefit your startup. Search social media accounts like LinkedIn profiles and articles published by the candidate to back their experience and knowledge. You’ll gain a mutual understanding of what fractional CFO means and how much the financial services cost based on your business needs.