It’s one of the hardest things a founder or early team member must do. A remote CFO handles their roles from outside of the work environment. They are often less expensive than other iterations of CFOs, but companies need the right infrastructure to bring one on board. Remote CFOs are a good fit for organizations willing to implement the technology, who do not need immediate, physical access to a CFO in-house. There is no need to worry about contracts or how they will impact your business.
At many companies, a CFO is a full-time, salaried employee, working solely on advising one business. A fractional CFO works with companies to steer financial decisions in a direction that ensures good financial health. However, this is traditionally on a part-time basis only (and at a fraction of the cost of hiring a full-time employee). One of the most important questions to ask your fractional CFO is whether they have experience in your industry. Having a fractional CFO experienced in your industry places you in the best position to achieve your financial goals. Scaling businesses need all the services fractionalized CFOs provide.
Ongoing Part-time CFO Services Fill the Gaps
Cash flow management is essential for the success of any business, and a fractional CFO can help you manage it more effectively. An unbalanced AP and AR lead to trouble when the scale tips towards AP. Expenses that become unpaid debts strain vendor relationships and put your company deep in the red. Instead of waiting for a molehill to become a mountain, CFOs adjust budgets and focus on improving revenue beforehand.
At the end of the day, your fractional CFO will effectively become the financial voice of your company and (in some cases) possess the authority to make decisions. Therefore, it’s critical to find someone with a solid professional reputation that you can trust implicitly. At The CEO’s Right Hand, our fractional CFOs have decades of what does fractional cfo mean experience across multiple industries. Most fractional CFOs charge by the hour or day, which results in different monthly costs depending on the level of engagement a company needs. You might hire a fractional CFO for a one-time project, or you may wish to set up a retainer arrangement so you can receive their advice regularly.
The Unique Challenges You’ll Experience As A Fractional CFO
A fractional CFO could be hired using full-time equivalent (FTE) hours, or as a contractor. FTE is a unit that measures an employer’s number of full-time employees based on the number of hours worked. As an FTE the CFO would be an employee of the organization, while a contractor remains independent. And just like any entrepreneur, you have to consider your small business finances.
Also known as an interim CFO, a fractional CFO is ideal for growing companies that need the strategic, financial guidance of a CFO, but do not require 40 hours per week. Often, at this stage, companies may not be complex enough to require a full-time CFO or have the budget to justify one. A fractional CFO is a more cost-effective solution for meeting needs as they arise. Many think that fractional CFOs are not as experienced as someone you could hire full time.
