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What is a Fractional CFO?

By definition – A chief financial officer (CFO) is one who is primarily responsible for managing the company’s finances. The CFO’s duties include tracking and improving cash flow, financial planning as well as analyzing the company’s financial strengths and weaknesses, with proposing corrective actions whenever necessary. 

A CFO directly assists with all business matters relating to budget management, cost-benefit analysis, forecasting needs, and securing new funding.

Fractional CFO vs. Traditional CFO

The fractional CFO is a person who specializes in providing specific financial services to small businesses. 

small, medium, big companies work with fractional CFO

As the name suggests, a Fractional CFO is not responsible for managing the entire company’s finances. Instead, this person focuses on one aspect of finance — budgeting and forecasting — and helps his or her clients improve their cash flow, profitability, and growth.

In many ways, the fractional CFO is similar to a CFO who works at a larger company. Both hold the chief financial officer (CFO) title, but their duties and responsibilities differ. 

A fractional CFO doesn’t have direct oversight over all aspects of business operations; instead, they provide advice and counsel on how best to use available resources to make critical business decisions.

In fact, some fractional CFOs work with companies as consultants or advisors — helping them plan for future growth by suggesting ideas that could improve efficiency or reduce costs. Others may even help businesses improve their financial performance by offering advice on how they can better manage their accounts.

Fractional CFOs are similar to CFOs who work at larger companies. They have the same responsibilities as a traditional CFO, but they are responsible for a smaller number of businesses. The size of the company that they are responsible for can range anywhere from 1 to 100 employees.

Fractional CFOs also have many of the same skills as traditional CFOs. They need to understand accounting principles and how they apply to the company’s financial situation. They will also need to understand how the business works and what it needs in order to run efficiently.

Fractional CFOs should also be able to communicate with investors, employees, and other stakeholders to help people understand what is happening inside their company.

How Fractional CFOs can help your business

  1. Implementation of proper procedures and processes: Fractional CFOs have implemented new processes and procedures for other clients multiple times before. A fractional CFO, based on his or her experience, can ensure that the implementation of new and or proper procedures and processes is smooth and glitch-free and is done without any disruption to the existing workflow.
  2. Provide financial clarity: Fractional CFOs help guide forward-thinking financial strategy as businesses hit key growth milestones and face increasingly complex decisions. With a fractional CFO, business leaders will have access to accurate financial reporting and data analysis needed for decision-making.
  3. Implement and integrate business solutions: Fractional CFOs translate financial data into actionable intelligence. Fractional CFOs will likely replace or implement new technology platforms to create solutions that require financial insights and tax compliance.
  4. Coach and Train your financial staff: Fractional CFOs know every nuance of financial planning, projections, and risk analysis. They can analyze their work processes and accounting systems, provide expert guidance and training to your staff, and or make recommendations for ways to save time and money.
  5. Helping to navigate crisis situations: Fractional CFOs can provide multi-scenario modeling to aid in tactical decision-making and offer an unbiased financial perspective. As they have managed and organized many crisis management plans for various clients, this gives these CFOs the ability to implement controls to prepare for similar future situations.
  6. Prepare your financials to impress: Fractional CFOs can prepare your financials to manage stakeholder relationships. They can also prepare your financials to attract new clients and raise capital for your company.

Steps that BashoffCFO uses to improve cash flow, profitability, and growth:

  1. Diagnose Root Causes: Fractional CFOs perform an RCA (Root Cause Analysis) using multiple tools which help eliminate non-conformities that will lead to problems if left undetected.
  • Comprehensive cash forecasting
  • Purchasing & payment policies
  • Recurring & one-time revenue
  • Liquidity management
  • Processes & procedures
  1. Rapidly Fix Issues: Fractional CFOs create long-term solutions to every problem to keep it from escalating or recurring in the near future.
  • Profitability opportunities
  • Cash flow metrics & scorecards
  • Accelerate billing & collections
  • Expense & waste reduction
  • Pricing/margin enhancement
  1. Scale Growth: Fractional CFOs are about creating business models and transforming your organization in a way that easily scales in order to generate consistent revenue growth.
  • Streamline operations
  • Supply chain management
  • Strategic tax planning
  • Working capital management
  • Monitor leading indicators & trends

Finding a Fractional CFO well fit for your company

All businesses shares at least one thing in common: the desire to improve profitability. Especially for a young startup, the only way to get access to best-in-the-business expertise without having to pay through the nose would be by hiring an experienced and good fractional virtual CFO

Why BashoffCFO?

BashoffCFO – your CashFlow CFO, is a team of innovative experts who have developed a new data-driven approach to radically improve your cash flow, fuel growth, and solve complex business problems. We are forward-thinking Business Advisors and Cash Flow CFOs, offering more than typical CPAs or fractional CFOs.For a free consultation. please call 410-952-6767 or contact us today!