How Can a Fractional CFO Help My Company?
This article will help you understand how a Fractional CFO fits within your organization and adds value to your company. We will consider only early-stage and growing companies to keep it simple.
Early Stage
Early-stage companies typically have a combination of basic accounting needs plus some complex transactional and planning needs. At this stage, you may hire an Accountant / Office Manager to handle your day-to-day transactions and office needs. You will rely on outside accountants, attorneys, and banking professionals to handle the financing, legal, and planning required to get your company to the next level. Guidance from outside experts, including a CFO Consultant, is critical to get you on the right path and ensure you aren’t making mistakes that could be costly to unwind. An Early Stage finance and accounting team may be structured as follows:
Early-stage companies need expertise that grows with your needs. You may need a Fractional CFO for a few hours per month or a few days per month. The goal is to get the expertise you need while staying within your budget.
A Fractional CFO will work with your existing accounting personnel to structure your accounting processes and assist with complex accounting issues. They will communicate and provide information to lenders, investors, and tax professionals. In addition, the CFO consultant will provide forward-looking financial information and guidance to help you with critical decisions. A CFO consultant will help you build a solid financial foundation to help grow your business.
Growing Companies
As your company’s revenue increases, your accounting, and financial reporting team will increase in skill and number. The team will generally include a Controller, Accounting Manager, AP and AR Accountants, and a Financial Planning and Analysis (FP&A) role as illustrated below:
At this stage, the accounting team needs structure to ensure it can scale and manage the company’s growth. Proper controls or ‘guardrails’ will give you confidence in the financial information. You will need forward-looking forecasts to support your decisions. You may outgrow your accounting software and need an upgrade. Your lenders and investors may require an audit or review from an outside CPA firm.
A Fractional CFO supplements your team with expertise and the added flexibility to take on projects. Your team can look to the CFO consultant for guidance on complex accounting and finance issues. The Fractional CFO will prepare a budget and forecast and help you select and implement accounting software. In addition, they have the ideal experience and expertise to manage your audit.
Summary
Throughout most companies’ lifecycle, you will benefit from the experience of a CFO. A Fractional CFO allows you to get the expertise you need when you need it and at a cost that fits your budget.
Additional resources: Why Are CFO Consultants in High Demand?
About Highpoint CFO
Highpoint CFO is a CFO consulting firm based in Tampa, Florida that serves clients throughout the US.
Scott Young is the President and Principal Consultant at Highpoint CFO. He is a CPA, Certified Merger & Acquisition Advisor (CM&AA), and Certified Value Growth Advisor (CVGA) with over 25 years of experience in finance and accounting at industry-leading companies.
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