Using Outsourced CFO Services: 7 Ways a Fractional CFO Can Help You Grow Your Business
Learn How Using Outsourced CFO Services Can Benefit Your Business
When you choose outsourced CFO services, you’re getting more than financial analysis. The right fractional CFO can help create a better business and increase value.
Is your cash tight? Do you need a helping hand to take your business to the next level?
If so, you are not alone!
Many businesses don’t know the right metrics to track their financial health. Other businesses simply don’t have a good grip on their company finances. Hiring a full-time CFO is one of the ways to help save the situation, but the business may not require full-time support and the price of that talent.
- What if you could get the services of a CFO but on a part-time basis?
- Maybe you could find a person to help grow your company by helping manage your finances and drive strategic planning?
- Instead of hiring someone full time as an employee, you used outsourced CFO services?
This is a fractional CFO!
The term “fractional CFO” may seem complicated, but it’s a very simple concept of outsourcing your CFO services, rather than hiring a permanent Chief Financial Officer. Instead, this professional offers their skills to your company either on a part-time or project basis.
If your business is experiencing some growing pains, a fractional CFO can come in handy. This executive can help with strategic financial support to get your business on the right track. They are usually involved right from the planning stage to execution.
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So, What Does a Fractional CFO Do?
There are many ways your business can benefit from outsourced CFO services, but let’s take a look at some of the main areas.
Redesign Your Financial Management Process
When you hire a fractional CFO, you are getting more than helpful knowledge. This person can help redesign your financial process for better information. They can overhaul reporting, track KPIs (Key Performance Indicators), and coach executives that are not financially-oriented so that they can have skills to read numbers and make better decisions.
Strategic Planning and Operational Improvement
If you need long-term or short-term financial planning, a fractional CFO is a perfect person. They can step in and help streamline your financial reporting process, helping you and your management team understand your business’ financial health.
They can also help you in operations - process and accountability, improving the way you use data through ERP or other systems. The right outsourced CFO can really shine by bringing together the different parts of the business - Sales and Operations - to get them on the same page.
Budget Planning
A solid budget plan is an important aspect of any business. Thanks to the knowledge that CFOs possess, they can help you develop a workable budget that fits your financial needs. And they don’t stop there! These professionals continue to monitor your spending, ensuring that any necessary adjustments are implemented accordingly.
Provide an Objective Eye
Numbers don’t lie. A fractional CFO has the necessary finance and accounting skills to look at the numbers in your company and determine business initiatives that are not helping but losing money.
They give you an objective eye on your financial health, guiding you where to focus your resources on and, of course, what to do to cut losses.
In a chronically leaking boat, energy devoted to changing vessels is more productive than energy devoted to patching leaks.Warren Buffett
Facilitate Change
Change is inevitable for any business. At some point, you will reach that transition period, where you need to make some important changes in your business to match the ever-evolving world. A part-time CFO will help oversee the numbers to determine the short-term and long-term business performance, and you make those changes.
If your business finds itself with negative cash-flow, the fractional CFO can quickly identify the key factors that lead to these issues and recommend action.
Offer Accurate Cash Flow Projections
Many businesses fail because of cash flow complications. It is important to understand whether your future cash flow will allow for your survival. A fractional CFO has the experience to provide cash flow projections, helping you make better decisions.
If you are experiencing a crisis when it comes to cash flow, an experienced professional can devise steps to mitigate this.
Bonus Tip:
There are many ways a fractional CFO can help you scale your business to the next level. Most importantly, they can offer you a helping hand on anything related to the company’s financial department — be it running accounting systems and support during a company audit.
In the case of a public offering, acquisition, or merger, this professional can also help you perform due diligence.
Not sure if you should hire an outsourced CFO?
