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MLA provides fractional CFOs to many small to mid-sized companies. But what are the advantages of a fractional CFO?
A CFO, or Chief Financial Officer, is responsible for interpreting financial data in a way that helps business owners make decisions for the future. And a fractional CFO is a finance professional that works in a business only as much as they are needed.
You need to know how money moves through your business, and how your decisions now will affect your cash flow in the future. But most SMB and startup owners lack the financial expertise to make reliable financial projections. A 2014 study by Intuit, the maker of QuickBooks software, found that 40% of small business owners consider themselves financially illiterate. And business finance and tax law have only become more complicated since then.
In addition, many financial professionals are not comfortable making predictions about what’s to come. “Accounting is by nature historical record keeping. Necessary and important of course, but historical,” observes Seth Morgan, MLA Founder, and CEO. “But it takes an entirely different set of skills to look into the future based on these past activities. That’s what a good CFO can do.”
Most small to mid-sized businesses can’t afford, nor do they need to hire a full-time, experienced CFO. As a company grows, the finance team grows, and someone needs to coordinate that team. But leading a finance team is not the same as being a CFO. The ability to create an effective financial strategy requires experience, and experience comes at a price.
There are many advantages to hiring a fractional CFO. Primarily, he or she can bring a high level of financial expertise to your business, but at a cost you can afford. A fractional model means that instead of working for one large company, an experienced CFO can work for multiple small companies.
At MLA, fractional CFOs work with 3 to 6 companies on average. Even more, a fractional CFO brings a unique and broader perspective formed from working with multiple companies, rather than only one.
Do you need help looking into the financial future? MLA can do that. Contact us to learn more.