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Fractional CFO

Hiring and retaining the right people is essential to the growth of any business.  But financial expertise and business experience are hard to come by.  More and more small business owners and nonprofit directors are bringing in a fractional CFO (Chief Financial Officer) for financial expertise.

What is a fractional CFO? This short video will tell you:

You no longer need to be secretly embarrassed or limit your opportunities because you are unsure whether you have a firm grip on your finances. These part-time, or contract CFOs bring a level of financial expertise that you do not need on a full-time basis. But you can benefit from their experience and insight at up to 80% savings over a full-time CFO’s salary and benefits.

The Benefits of a Fractional CFO

MLA Companies provides fractional, or outsourced CFO services to small businesses and non-profits across the country.  We have offices in the Dayton and Cincinnati regions of Ohio, and personnel in Virginia and Florida.  MLA can serve you in a range of financial services from bookkeeping to mergers and acquisitions.

Do you need metrics to better measure your company’s performance? Would a financial forecast help you plan for growth or show the impact of a decline in revenue?  Then you would benefit from a Fractional CFO.

What Is a Chief Financial Officer (CFO)?

A chief financial officer (CFO) is the senior executive responsible for managing the financial actions of a company. The CFO’s duties include tracking cash flow and financial planning as well as analyzing the company’s financial strengths and weaknesses and proposing corrective actions.

The role of a CFO is similar to a treasurer or controller because they are responsible for managing the finance and accounting divisions and for ensuring that the company’s financial reports are accurate and completed in a timely manner. However, a good CFO will provide oversight of your financial team and processes, and bring insights from the financial reports to your other executives to help make good decisions.

What is a Fractional CFO?

If your company is over $50MM in annual revenue, you may want to hire a full-time CFO. If your annual revenue is less than that, but above $500K, then you would likely benefit from fractional CFO services. There are other factors that can affect your decision to contract CFO services, but these general annual income numbers give you confidence that you’re in the range of businesses that bring in part-time CFO services.

Would receiving your financial statements quicker allow you to make better decisions? Do you understand what your financial statements are telling you about the future of your company and what you should be doing now? An outsourced CFO can help you with that.

Benefits of a Fractional, or Outsourced CFO

You may be wondering how, specifically, a fractional CFO service can give you an advantage in your market. Here are seven ways small businesses and nonprofits typically use fractional CFOs:

  1. Redesigning the entire accounting process. When you bring in an experienced fractional CFO, you’re not only getting someone with helpful knowledge; you’re getting someone who can implement processes that have been proven to work in other organizations. You might be surprised by the number of errors that can be eliminated and how much your financial team’s efficiency can improve.
  2. Overhauling reporting. Many organizations lack financial clarity because they don’t get the right reports on a regular basis. A fractional CFO service will often come in and adjust or completely rebuild weekly, monthly, quarterly, and annual reports to deliver data that informs decisions. This may involve tracking new or different Key Performance Indicators (KPIs). The KPIs to watch often vary by industry and business size/growth stage, so look for a resource with experience in your industry if possible
  3. Coaching the CEO/Owner. CEOs who are not financially oriented look at numbers and see numbers. A fractional CFO can teach you how to look at numbers and see the story behind the numbers. So you’ll not only get immediate insights from the CFO, you’ll get the training that will help you become the data-driven CEO you’ve always wanted to be.
  4. Replacing technology platform(s). CFOs are often called on to audit and/or replace financial software platforms which should streamline processes and enable a business to scale. That’s a tall task and one that will have long-term implications, for good or bad. These fractional CFOs are tasked with implementing and integrating all the solutions required for financial insights and tax compliance.
  5. Navigating a cash crisis. It is not uncommon for small businesses to seek CFO services when their backs are against the wall. A top-notch fractional CFO has been in the trenches before and can jump in and prioritize tasks by the greatest impact to keep the lights on. The fractional CFO can also put cash management controls in place to ensure the business is never blindsided by a cash crisis again. These controls give you the time to respond if a crisis is on the horizon.
  6. Managing key stakeholder relations. When there’s skin in the game, people get demanding. A good fractional CFO will have the financial acumen to deliver the right package of reports to and field tough questions from boards, investors, or banks. But there’s nothing wrong with bringing in a pro to help you navigate those important relationships.
  7. Raising capital. Some fractional CFO service providers may be willing to hit the road with you as you pitch to angels and VCs. Others can prepare your financials in a way that will attract capital, even if they don’t actively participate in those pitches and negotiations. Either way, find a fractional CFO with experience in fundraising, preferably in your industry.

If you’re experiencing a cash crisis, are having difficulty getting reliable financial information, or have questions about how to prepare for future contingencies, MLA can help.  Our team of fractional, outsource CFOs have the experience and expertise to guide you through this uncertainty.