Some companies require the services of a CFO, but they don’t have the means (or need) to fill that role with a full-time employee. Though the overarching responsibilities are relatively straightforward for CFOs, the specifics of what they do for these companies depends on the company’s individual needs. For example, a company might need to raise capital or implement a new accounting system altogether. They might also need to strategize for a specific project like an audit. In one of the first experiences I had in this role, I was working with a medical practice who unfortunately found themselves in the red and needed help to get their ship turned around. Within 90 days, I was able to fix some of the bottlenecks that were causing their financial and cash flow difficulties and resolved a good amount of the debt they were in.
You may have fluctuations in earnings, so make sure you have some capital saved up for your slow seasons. And remember to take into account the cost of your own insurance, and IRA as you won’t be enjoying the company benefits you may be used to. Devany explains how he runs his business as a fractional CFO, why companies are more open to hiring a fractional CFO today and the unique challenges and advantages of taking on the fractional CFO role. Some companies see mentoring current staff members as an important role for a CFO. With years of experience, fractional CFOs can make good mentors and trainers. In fact, many seek out fractional positions for the opportunity to work with teams to help develop their skills.
At Acuity, we understand the financial challenges startups face as they grow. That’s why our fractional CFOs are equipped to provide the strategic financial guidance you need to be successful, while still offering a cost-effective solution. Fractional accounting is when you hire a firm or an individual to manage your finances on a fractional basis … Meaning they aren’t full-time, and they only provide the exact hours required to fulfill your specific needs. Even if you don’t have 40 hours worth of work per week to give a full-time employee, you’re still paying them their full salary, vacation time and benefits.
Compared to a fractional, contracted CFO, an FTE CFO is less scalable. Sometimes companies are comfortable with engaging a fractional CFO for part-time what does fractional cfo mean work because they don’t require a full-time CFO. This client scenario is also optimal for a fractional CFO looking to create an ongoing relationship.
“I was the controller, the accounting manager, and the payroll manager.” But he wanted to just focus on the strategic part of being a CFO, he says. “I thought it might be really interesting to be the CFO of multiple companies simultaneously,” DeGolier says. “I gravitated toward the flexibility of working in different industries and with different cultures,” he explains. Startups can get overwhelmed with managing their finances on top of other responsibilities. Accurate, real-time financial data and strategic financial insights can mean the difference between make-or-break decisions.
They are responsible for tracking key performance indicators (KPIs), aligning revenues and expenses correctly, ensuring GAAP compliance, and preparing financial statements. Think of a fractional CFO, also known as a part-time CFO or virtual CFO, as an expert navigator for your business journey. Imagine you’re an entrepreneur planning a cross-country road trip – your business’s journey. You’ve got a map, you’ve filled up the tank, and you’re ready to hit the road. Rather than scrambling at the last minute, your CFO can instate tax management early to avoid bottlenecks.