What is a fractional CFO?
If you are a small businesses then you probably have a bookkeeper for everyday transaction management and a CPA for tax preparation. That is usually where small business accounting teams stop. But, should it? Let’s take a deeper look at what each professional specializes in.
A Bookkeeper is professional who handles all of a businesses transactions such as revenue and expense classifications, managing invoices, payments and occasionally payroll. Bookkeepers are helpful when business owners are needing to focus more on the business strategy. These professionals ensure the financial statements are in order and ready to review. Their primary focus is on looking at the past to present day.
CPA is short for Certified Public Accountant. These are licensed accounting professionals who have passed several exams and have met state licensing requirements. They are able to help with tax preparation, accounting and tax audits, and financial statement preparation. Their primary focus is on looking at the past to present and how well your financial presentation follows state/federal regulatory guidelines.
Fractional CFO or Fractional Chief Financial Officer is a finance executive that provides high-level strategic financial guidance on a part-time or contractual basis. They may have a CPA or CMA (Certified Management Accountant) designation. A CFO’s primary focus is on creating financial strategies that tie the financial goals to the business goals.
Now that we understand what each accounting and finance professional focuses on, let’s talk about when it would make sense to hire a Fractional CFO. Here is a list of scenarios:
If you need help aligning financial goals with business goals
If you need help developing financial strategies such as budget planning, forecasting and analysis
If you a better understanding on your financial statements and what they tell you about your business
If you need someone to build a system that holds the business financially accountable
If you need help understanding your cash flow
If you need Financial and Capital Expenditure planning
If you want to make accurate data driven decisions
If you want help identifying financial risks in your business
To create internal controls to eliminate risks
To create forecasted growth plans and strategies to grow your business
The unique perspective of a fractional CFO is that they can tie the past, present and future together in one picture. They can explain the unique story of where we have been, where we currently are and gear us to where we are headed based on proven financial strategies.
