The concept of a fractional CFO is no different. Most business leaders recognize the need for trained, experienced financial expertise on their management team. Many simply do not need a full time CFO. Therefore, they cannot cost justify the investment of a full time salary.
Even if an owner or manager has the required skill sets, a professional CFO can likely generate a superior work product in less time. No successful entrepreneur ever launched a business with the intent of spending all day analyzing balance sheets, determining marginal profit contribution, dealing with bankers and tax accountants or addressing regulatory inquires. You can also get the best fractional cfo services through various online sources.
They launch businesses to exploit competitive advantage in their chosen field by servicing customer needs. Any time spent "working on the books" is time away from their real mission and a costly distraction from their value proposition.
Retaining a fractional or part-time CFO presents a cost effective solution customized to a business' exact needs, budget and life cycle. The key to a successful fractional CFO relationship is to design and staff that engagement with a professional who will understand your business and address your financial needs.
They must also become an integral (if part-time) member of your management team. Your fractional CFO should meet with you to tailor an affordable program to address your specific business needs.
Together, you will establish a regular schedule of dedicated time to service those needs. That schedule can vary from just a few hours per month to several days per week, and can be adjusted as future needs require. You the client can typically terminate your fractional CFO at any time and for any reason without incurring additional costs, just as you would if you had hired a full time employee.
The chief financial officer or CFO is the person primarily responsible for managing the overall financial operations of an organization. This position is responsible for planning, cash flow management, record keeping, financial reporting, etc.
The only difference between a traditional CFO and a fractional CFO is the nature of their relationship to the business. While a CFO is full time officer and employee, a fractional CFO is a part-time, independent contractor. However, their duties and responsibilities are virtually identical.