Fractional CFO is an experienced CFO who provides the best in class financial services to the organization without taking any external bonuses or perks from the company like a full-time, in-house CFO. Fractional Outsourced CFOs mostly overcome financial challenges, achieve growth, implement strategies, and raise capital and transactions.
Small businesses hire a well-established, experienced Outsourced CFO to keep an eye on their accounting and financial functions.
Fractional CFO Duties & Services
There are several Fractional CFOs duties and services:
1. Experiencing development, such as adding new products and services and expanding into new and emerging markets.
2. Resolving issues such as cash flow problems, tight margins, strategic cost-cutting, and implement practical long-term change.
3. Raising compact or value capital by providing techniques, attend meetings to establish proficiency and advising on the right combinational package of debt and equity finance.
4. Maximize Margins by analyzing ongoing cost and pricing structures, and current financial documents to determine strengths and weaknesses.
5. Scaling systems to deal with development and added complexity, including sales, finance, or business development.
6. Providing financial forecasts, including budgeting, fundraising, and analyzing the health of a company.
7. Financial Systems Strategy helps in selecting and negotiating with the service providers and collaborates with trained personnel to maximize understanding, comfort, and utilization.
What factors influence how much Fractional CFO Costs?
There are several factors that may influence Fractional CFO cost, and it may vary from company to company as bigger organizations have more complex financial systems with higher costs and require more development in different areas to increase the customer base. Small companies often have decreased fractional CFO costs.
1. Complexity of Financials
The size, growth, and industry are important factors that may influence the whole production of the company, and it determines the cost of the fractional chief financial officer.
2. System Design and Implementation
The Fractional CFO gives support to the business. Sometimes, the Outsourced CFO trains the existing in-house CFO to increase the productivity of the company.
3. Supporting Team Members
The fractional CFO is most likely to have expert professionals for bookkeeping and other financial controlling purpose.
Cost of hiring a Fractional CFO
Companies mainly hire Outsourced CFO services to manage their costs because they cannot afford a full-time CFO or controller. So, Virtual CFO is proved to be the best option for companies.
Now, the cost of hiring a full-time CFO can be range from $175,000 to $480,000 per year, and companies provide several other benefits like vacations, bonuses, and other kinds of allowances. A Fractional CFO services provides a quality service to make the CFO firms successful at a very affordable cost.
The external CFO Service includes bank relationships, weekly meetings, forecasting, company-wide Key Performance Indicators, and several other duties that make it different from the full-time, in-house, and higher salaried CFOs.
Here is one term that can create the difference, i.e., Fractional Controller, which is a little bit different from Fractional CFO. The Financial Controller provides:
- Cash management
- Produce monthly financial reports and profit and loss statements
- Provide best in class financial services
- Keep an eye on audit preparations
- Dealing with Software upgrades and implementations
- Industry-specific reports and analysis
- Expert guidance with QuickBooks, NetSuite, and Sage products.