The Fractional CFO Is The Future Of Finance, And It’s About To Take Off

What is a fractional cfo?

A fractional CFO is the wave of the future and the idea is ready to take off. A fractional

CFO is outsourcing the CFO’s functions to an outside firm. Fractional CFO

services have been around for decades, but it has been mainly confined to larger

organizations. For many smaller and medium size businesses, a CFO has been more of

a luxury position, as positions such as CEO (Owners), COOs, CMOs, and other

operational managers took precedent over the financial management of the company.

Traditionally, for most companies, the leaders on the operational side of the company

produced the most revenues or profits for a company. Thus, many companies are losing

money by not managing the company finances properly. The fractional CFO is the

solution that can offer a company a new unseen revenue or profit stream.

Why You Should Care About a Fractional CFO Model

All business owners or CEOs know that adding a full-time staff member means adding

more costs than just their salary would entail and for a C-level employee the costs of

benefits mean a non-operational position just cannot be justified. Using a fractional CFO

doesn’t add that much to the expense of the bottom line. Since the fractional CFO is a

service that a company can subscribe to, the costs are more in-line with a consulting

fee. But, by using a fractional CFO, the company will benefit twice from the service.

First, the fractional CFO saves the company money by not adding all the added fees

associated with a full-time employee. Then the other side is the benefits of having a

professional CFO manage the company’s finances, which will make the company’s

assets, especially cash, work for the company. Since a fractional CFO will assist in

managing payments, invoices, accounts, and other financial activities, they can add

more funds to the bottom line. A good fractional CFO service can often add more

savings to the revenues than their fees. Bain Capital has done some research into the

benefits of using a fractional CFO and in general, a company that uses a fractional CFO

has more revenue. The study found that on average companies that use a fractional

CFO have $1 billion in revenues and $2 million in profits. The services that a fractional

CFO offers can range as well, allowing the contracting firm to pick what they need

specifically. Services might be as detailed as analyzing revenues from clients to see

which need to be optimized for maximum profits or cash flow to simple reviewing of the

books.

How Do I Know When I’m Ready For A Fractional CFO?

It is hard to argue that using a fractional CFO service cannot be of beneficial use to a

company that doesn't have a CFO. Powell Finance Group does offer fractional CFO

services and you can always reach us at www.powellfinancegroup.com we will always

be happy to speak with you to see how we can help you. While we will tell you how we

can help you and offer services that particularly match your company’s needs. Always

remember, a fractional CFO specializes in making your financial assets work for you,

becoming another revenue source by properly managing the financials of the company.