We were recently hired by the CEO of a manufacturing business who felt that something was amiss in the accounting/ finance arena but could not identify the problem. In conducting https://www.bookstime.com/ our investigation, we noticed that inventory was quite high relative to sales and determined that a manager had decided to put a big inventory cushion in place.

You often open new locations or launch more products when you grow past your start-up phase. For example, when the economy slows and growth assumptions have to be pared back, you will have to make some difficult decisions. That may involve reducing compensation, staff, and/or warehouse space, pressuring suppliers for better terms, or seeking new capital. When profitability is not where it seems like it should be, or cash flow is a problem, or the books are not done right, you need help but may not know exactly what kind. That what is a fractional cfo means that while using a fractional CFO is better than the alternatives described above (no CFO or a full-time CFO who is not busy and is therefore overpaid), having just one fractional CFO is often not ideal. If we must use the term “fractional CFO”, we think of it as a way to get exactly what your company needs at a fraction of the cost of having a full-time CFO. Most founders simply want the finance function of their startup handled by someone else, which is why they look into hiring a fractional CFO for their startup.

How a Fractional CFO Can Transform Your Business

In fact, this might be the most critical aspect of a Fractional CFO’s role within an organization and can save your butt in countless situations. Gary serves clients by offering them proactive tax advice, business advisory services and consulting work as a fractional CFO.

There are also companies that specialize in matching businesses with fractional CFOs, or who have a team of CFOs that you may be able to engage. Additionally, look into companies that offer a range of back office support, including bookkeeping, accounting, and tax preparation. As with a full-time CFO, a fractional CFO can also explain the significance of these financial insights and metrics to the company’s leaders so they can make strategic decisions. But a CFO generally isn’t involved in day-to-day accounting or bookkeeping services. Those may be managed internally, outsourced to a service provider, or covered by a combination of the two. A fractional CFO brings equivalent experience and expertise as a full-time CFO, but does not require the full-time salary, vacation, and benefits. Also known as an interim CFO, a fractional CFO is ideal for growing companies who need the strategic, financial guidance of a CFO, but do not require 40 hours per week.

When does a startup need a fractional CFO?

Fractional CFOs are in high demand and finding someone who has enough time to dedicate to your business can be a challenge. Working with someone who doesn’t have the bandwidth to give you the attention you need could later become a massive mistake. A company gearing up to get ready for a $100 million venture raise is very different from a company with more modest capital needs. You need someone who understands your stage and can propel you towards future goals. Even if a startup’s financial needs do not seem that complex, it is important to think about every need, even non-financial.