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10 Reasons to Hire a Fractional CFO

Is your company expanding with big goals on the horizon? If your annual revenue exceeds $500,000, you might be at a place where you can use accounting as a tool. But hiring a full-time CFO may be beyond your reach, especially if you only have a small team. That’s when your best option may be to hire a fractional CFO.

By Joel S. Smith

A CFO, or chief financial officer, is tasked with managing the financial health of the business, which includes optimizing its performance. A CFO guides the business from a standpoint of finances, working in partnership with the CEO or owner to ensure the right choices are made in planning, spending, and even M&A.

 

A fractional CFO does all that a full-time CFO does for a company but on a consultant basis. When you hire an outsourced CFO, you gain a partner who will help you understand and use your financial data to guide your business to higher ground.

 

Why should you use a fractional CFO rather than bringing one on full time? Here are the top 10 reasons:

 

1. Cost Effectiveness

The median salary for a full-time CFO is $397,448, according to Salary.com. When you hire a fractional CFO, you can expect to invest between $3,000 and $10,000 a month, depending on your location and the amount of support and expertise you need from a CFO.

 

2. Increased Confidence Among Stakeholders

Investors, vendors, partners, employees, and customers rest easier knowing that your company is financially secure. Your stakeholders don’t need to know that the CFO is full time or a consultant; all they care about is that you have a designated leader to manage the company’s fiscal future.

 

3. Flexibility

When you hire a fractional CFO, that person could be anywhere since you use their guidance as you need it. Likewise, they can work onsite or remotely.

 

4. Enhanced Perspective

There’s something to be said for getting outside help. Your fractional CFO will work with other companies as well as yours, which enables you to tap into their wider perspective. Perhaps they’ve seen something similar at another company or industry and can bring that information to you to help your business succeed.

 

5. Better Financial Information

If you’ve been doing the books yourself, you probably aren’t an expert. A CFO is. They’ll be able to provide information to make sound fiscal choices moving forward, giving you guidance on purchases and investments, as well as where you might want to cut some costs.

 

6. Improved Operations and Internal Controls

Some companies have an accounting team onsite, but they lack the leadership of a CFO. When you hire a fractional CFO, you’ll gain a leader who can help set up operations and internal controls, such as key performance indicators.

 

7. Increased Productivity

If you’ve been helming the ship of your business as its owner, wearing too many hats, to hire a fractional CFO means you can reclaim some of your time and focus. Smart business owners put their efforts where they’re best used—and outsource everything else.

 

8. Specialization and Knowledge

Perhaps one of the best benefits of working with an outsourced CFO is the ability to tap into their years of experience. Your CFO is your guide in all things financial and will provide a depth of experience in the strategy aspect, ensuring your business is headed in the right direction.

 

9. Trusted Team Member

As a consultant and guide, your outsourced CFO is trusted member of your team—regardless if they’re full time or serving as a consultant. You, as the business owner, should trust your CFO enough to be completely transparent with them, and you’ll have a strong relationship, just as you would with any other member of your team.

 

10. Better Decision Making

A fractional CFO will help you position your company to become more valuable in the future so you can consider your exit strategy now. Plus, they’ll help with today’s financial decisions as well.

 

Ready to Hire a Fractional CFO?

If you’re a small business owner who’s ready to level up your game, it might be time to hire a fractional CFO. JSS & Associates offered outsourced CFO services and is ready to help you make the right financial decisions. Contact us to learn more.