(Newswire.net — May 22, 2020) — If the main agenda for your company is to overcome financial challenges, attain growth and achieve an exciting financial freedom for your company then a CFO can come in handy. CFO stands for Chief Financial officer and this is the individual charged with the heavy duty of ensuring the company stays afloat financially. They account and report the financial situation, analyze and prepare a financial plan and also assess risks and advice on the general financial outlook of the company. A CFO can either be employed on a full time or part time basis, depending on the company management.
So, what is a fractional CFO? Well, this is a financial officer who does not work full time at your company. They basically, just as the name suggests, give you a fraction of their time to steer you in the right direction, financially. They mostly work on contractual terms, and usually come on board based on the project at hand, for instance, overcoming a major financial challenge. They are as qualified as a CFO, only that they offer their services on a part time basis.
Do you really need a fractional CFO for your business? The answer is yes. When you are having some financial hitches and need help to get out of it to attain growth, this is the professional to look out for. It is both a financial and time investment, but it is always worth it in the end. The fact that you are struggling financially is a sign that you need a fractional CFO, but only for a few hours a day, for as long as the contract runs.
Sometimes you are not struggling financially but your goal is to attain growth and get your staff motivated. If you find yourself constantly asking why your employees are not motivated or why sales don’t seem to go up, then you should think about hiring a fractional CFO. Below are reasons why your company needs one:
Financial Strategy
As mentioned above, sometimes you wake up and realize your company is stuck in a rut, financially, and if you do not have an accounting background, it may be difficult to figure out exactly where the problem is and find a way out. Since this is exactly what they do, a fractional CFO will help you figure out the cause of your financial stagnation, and help set up a working strategy that will get you out of financial quagmire and steer you towards growth. A fractional CFO will bring value in situations where your internal finance and accounting staff don’t have enough expertise to prepare a functional financial strategy.
Assess Financial Risks
A fractional CFO will not only prepare a financial strategy for you, but they will also assess the financial risks in your company and advise accordingly. Companies have moments of missed forecasts and expenses that may not have been captured in the initial budget, both which are detrimental to the financial health of the organization. These are some of the curves that CFO’s look to flatten and hiring one will help you identify the unforeseen loopholes and also advise on how to prepare for adversity and subdue the effects of any challenges that may arise.
Agent of growth
Being a fractional CFO, they are not tied to one organization most of their working days; they tend to work with different companies and industries. This opens their minds to different ideologies and they keep learning new skills and ideas wherever they go. It is this bout of exposure that gives them an upper hand in being agents of growth. They can uniquely apply the efficiencies that they learned from a different organization, to catapult your company to greater heights and achieve financial growth and sustenance.
Financial Reports
When there is no financial clarity, the reports generated regarding finances in the organization might not be right. A fractional CFO will deliver clear financial data and also give informed financial decisions. The professional may also coach you on how to look at financial figures and tell you what they translate to. Typically, they redesign the entire accounting process. And because they are not here to stay, during their tenure they can also train the in-house finance and accounting staff to aid a smooth transition once their contract ends.
Having looked at the benefits of contracting a fractional CFO above, the verdict is that you do need a fractional CFO for your business. Hiring one is cost effective because you will only pay them for the hours they have worked. You will not have to worry about paying up their statutory deductions, and other benefits that your employees are entitled to. For this reason, even a company that is just starting up can also afford the flexibility of a part time chief financial officer.