Chief Financial Officers (CFOs) play a pivotal role in supporting businesses’ ongoing success and growth. CFOs guide financial decisions for the company by analyzing a company’s financial position. These responsibilities include cash flow management, financial planning and analysis, supervising finance personnel, choosing investment strategies and ensuring compliance with laws and company policies. CFOs possess an in-demand mix of expertise, experience and education, making hiring a full-time CFO costly. However, a cost-effective solution for small businesses seeking a CFO’s services is hiring a “fractional CFO”.
A fractional CFO is an experienced CFO hired on a contractual basis to assist a company in accomplishing a specific goal or project. Fractional CFOs can be especially helpful for small businesses that do not have the capacity or resources to hire a full-time CFO.
5 Benefits of Outsourced CFO Services
Here are five benefits businesses can realize by utilizing outsourced CFO services:
- Cost-Effective: Hiring an experienced fractional CFO is a more cost-effective alternative for businesses than hiring a full-time CFO. Fractional CFOs are employed on a contractual basis, often for a specific goal or time commitment, without the in-house costs of salary, health benefits and bonuses associated with hiring a full-time CFO.
- Forecasting: Fractional CFOs are experts at analyzing a company’s financial position and market environment to evaluate economic outcomes. Forecasting provides small businesses with valuable metrics and insights for understanding past performance and establishing achievable goals. Fractional CFOs have unique experiences with a myriad of different business models and scenarios to create a more comprehensive forecast.
- Achieving Organizational Goals: Fractional CFOs are well suited for helping an organization achieve specific goals, particularly when a company lacks the skills or personnel to overcome these challenges. Common scenarios for which fractional CFOs are contracted are managing cash flow issues, cutting organizational costs, raising capital and providing audit support.
- Flexibility: A seasoned fractional CFO’s contract can be scoped to meet a small business’s needs or budgetary constraints. Furthermore, an outsourced CFO’s involvement can be scaled to seasonality or business demands. Services can be adjusted with greater ease, making hiring a fractional CFO a more flexible solution than hiring a full-time CFO.
- Expert Advice: These professionals often possess a wide range of experience in different industries and have access to institutional resources that a small business may not have. They can also provide an impartial perspective that is not biased from an internal perspective in the company.
Takeaways
Utilizing fractional CFO services can be a viable option for small businesses looking for a cost-effective solution for their financial management needs. Withum’s Outsourced Accounting Systems and Services (OASyS) Team is a valuable resource for small businesses seeking these high-level services.
Author: James Holl | [email protected]
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