Small business owners can get the benefit of high-level financial guidance without making a full-time hire by working with a fractional CFO.
Many small businesses lack the strategic financial insight they need to make long-term improvements. They could use skilled financial professionals to help them make informed strategic decisions, but they lack the resources to support a full-time financial department.
Outsourced bookkeeping and controller support can be invaluable in filling this void. But some businesses owners could also use input from a fractional CFO (chief financial officer) to guide their business in the right direction.
What Is a Fractional CFO?
Basically, a fractional CFO is a part-time CFO serving small businesses. The role can be ongoing or temporary, depending on need.
From a practical perspective, that means small businesses could turn to a fractional CFO for input on topics such as:
- Figuring out when to hire more staff (as well as how many staff members to hire and in which roles)
- Setting an annual budget
- Determining when and where to expand to a new location
A fractional CFO can be particularly beneficial to a company that is trying to formulate and implement a comprehensive growth strategy.
Bookkeeping Services Help You Get More out of a Fractional CFO …
Much like a CPA, a fractional CFO must have accurate and up-to-date financial records in order to make fully informed recommendations. Many small businesses discover, therefore, that it’s best to take a coordinated approach. That means starting by outsourcing their bookkeeping and controller services to be sure their records are up to date and accurate—and then recruiting a fractional CFO who is on the same page in terms of workflow, systems, and processes.
… And Vice Versa
Once you have the appropriate level of support with bookkeeping and controller services, a fractional CFO can ensure maximum efficiency and value as you pursue your long-term financial goals.
“Having both a fractional CFO and outsourced bookkeeping service will help streamline your processes and controls, save time and, most importantly, save money,” says Candi Hughes, principal and founding partner of NextTier Solutions, which provides fractional CFO and other support for small businesses.
Hughes says a partnership with a fractional CFO can yield a host of practical benefits, including:
- Cost savings: Because each group can focus on their specialty, neither has to waste time on inefficient tasks and can devote their full attention to serving your needs.
- Extra reviews of financial data: The bookkeeper processes transactions and reviews for accuracy, while the fractional CFO performs analytical reviews of your results to ensure your data is correctly entered and presented.
- Additional controls: It’s simple: The more accounting support you have, the easier it is to segregate duties and build controls.
Passing the Chemistry Test
If you think your small business is ready for strategic growth and could benefit from a fractional CFO’s guidance, start your research today. Look for a fractional CFO who specializes in your particular area of need to be sure you’re speaking the same language. The more streamlined and seamless the communication is among all parties, the more cost-effective, efficient, and productive the process will be for the business leader.
If you’re already using an outsourced booking and controller service, that’s the perfect place to begin. They might have existing relationships with one or more fractional CFOs and could make just the right referral to help you take your small business where you want it to go.
Sandra Finerghty, Managing Director of Supporting Strategies | Durham & Chapel Hill, NC, provides outsourced bookkeeping services, controller services and operational support to growing businesses. She works with CFO partners to provide a complete bookkeeping and controller services solution for clients, enabling CFOs to focus on strategic consulting services.