If you are new here, welcome to my channel, and if you are returning, welcome back! On today’s quickie, we are answering the question, “What is a fractional CFO, and do I need one?”
So, what is a fractional CFO? We should probably start with what a CFO is… CFO stands for Chief Financial Officer. The CFO is a top-tier executive who manages everything related to a company’s cash flow and controls financial planning and taxation issues. Every successful company should have a CFO, but it is expensive. Companies must pay hefty salaries, vacation time, and benefits to full-time executives.
To avoid this issue, you may consider hiring a Fractional CFO (sometimes called an interim CFO or an outsourced CFO). A fractional CFO is ideal for growing companies that need the financial guidance of a CFO but does not need one full-time. For example, service businesses with $750,000 in revenue or product businesses with $1,500,000 or more in sales have started to outgrow their early mom-and-pop systems. More complex organizations may want to start putting in real systems earlier. If you need to get financial information to the decision-makers in real-time, then Fractional CFO services give you the tools to make data-driven decisions.
As your business grows, small changes can have a significant impact. For example, a 10% improvement at a $1,000,000 company is $100,000, while you’d ignore such a slight improvement when you were just starting. Using fractional CFO services lets you find those improvements without needing to add multiple 6-figure employees.
A fractional CFO comes at a fraction of the cost and provides invaluable insight into your company’s financial health. Thanks for sticking around, and I will see you all next time. Bye.