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.
But the route is long and complex, filled with detours, unexpected roadblocks, and opportunities to explore. You have a destination in mind, but you could use some guidance on the best path to take. That’s where a fractional CFO comes in.
What Is a Fractional CFO?
Think of a fractional CFO, also known as a part-time CFO or virtual CFO, as an expert navigator for your business journey.
A fractional CFO is a highly experienced professional who delivers high-level financial strategy, planning, leadership, and guidance when you need it most. They’re pros at improving your start up’s financial health and creating in-depth financial plans that align with your business goals.
As financial strategists, fractional CFOs can help with whatever your business needs – chatting with investors, figuring out what your credit line should look like, and even getting into the nitty-gritty of pricing strategy. In a nutshell, their work spills over from pure accounting into finance.
But rather than helping one business full-time, a fractional CFO guides multiple businesses across a wide variety of landscapes.
Plus, they can offer the direction of a full-time CFO without the full-time salary, making them a cost-effective co-pilot.
Throughout this article, we’ll cover:
Your finance team plays a crucial part in ensuring your business’s success. It’s important to remember that each member of your financial team contributes in different ways:
1. Bookkeeper: A bookkeeper handles tactical tasks like paying invoices, processing payroll, or categorizing expenses.
They focus on when a transaction was paid, keeping a record of all financial transactions.
They are responsible for tracking key performance indicators (KPIs), aligning revenues and expenses correctly, ensuring GAAP compliance, and preparing financial statements. They give each transaction context.
3. CFO: A CFO, whether full-time or fractional, contributes to the business strategy by dealing with potential investors, determining the appropriate line of credit, strategizing pricing, and forecasting financial performance.
Their role extends into finance, providing financial leadership beyond just accounting services.
Acuity’s CFOs bring extensive hands-on experience and diverse skill sets, with track records spanning 30-40 years across a variety of industries. No matter your business model, their entrepreneurial perspective drives strategy development and success.
A fractional CFO can offer a range of financial management, advisory services, and consulting services – all on a part-time basis.
But how exactly does a fractional CFO actually benefit your business?
1. Help with raising money.
If you’re trying to raise money for your startup, a fractional CFO can really help. They know how to navigate the world of funding, they can help you make a great pitch, and they can even talk terms for you.
For example, Acuity’s fractional CFOs have been instrumental in helping startups raise the funds they need to grow.
2. Big picture financial insights.
Using tools like financial modeling, a fractional CFO can take a deep dive into your financial statements and help you see the big picture. They can:
- Spot trends
- Find problem areas
- Suggest ways to fix things
- Help you understand your financial metrics
So, say you run a subscription-based business, and too many customers are canceling. A fractional CFO could dig into the data, uncover the root of the problem, and suggest strategic ways to improve customer retention.
With rich experience across multiple industries, our CFOs provide insights that lead to better strategic decisions.
3. Budget planning, predictions, and strategic financial planning.
It can be tough for growing businesses to plan their financial future. Luckily, a fractional CFO is a seasoned financial professional that can help you set goals and streamline your internal processes.
So, if you want to grow your startup into a new market for example, a fractional CFO can help you figure out what that might cost and what kind of profit you could expect. That way, you can have reliable forecasts and budgets at your fingertips.
A fractional CFO can also help you map out long-term financial goals that align with your company vision, such as sustainable revenue growth. They’ll even assist in helping you achieve your goals through:
- Developing action steps
- Allocating resources
- Progress monitoring
4. Sorting out cash flow issues.
A lot of startups have trouble with cash flow management. A fractional CFO can help you improve the way cash moves through your business, and make more informed decisions to optimize cash flow!
Let’s say your company is struggling to stay afloat because your clients pay at different times. A fractional CFO could come up with a new plan for billing or negotiate better payment schedules.
With a CFO, you’ll get optimized cash flow, debt and equity financing, and alignment between your financial operations with strategic business goals.
5. Investor relations and tax advice.
A fractional CFO can help your business stay compliant with relevant laws.
On the investor side, they:
- Manage financial communications
- Provide financial insights to investors
- Keep you up to date with regulatory requirements
When it comes to tax expertise, a CFO oversees:
- Strategic, long-term tax planning
- Compliance with tax regulations
- Relationships with tax authorities
Most companies can’t stretch their budget to hire a full-time CFO. But every business, big or small, needs to lay down rules, procedures, and growth plans. That’s exactly where a fractional CFO can come into the picture.
So, let’s chat about the cost of Acuity’s fractional CFO services. We know financial stuff can be a bit complex, so we’ll keep it straightforward.
Hiring a full-time CFO can easily cost you around $250,000 per year. That’s a hefty amount, right? But here’s where our fractional CFO services come in handy, since you can get all the expertise you need, but on a part-time basis.
For as little as $40,000 to $50,000 per year or $4,000 per month, you can get top-notch insights from a CFO on a weekly cadence. That’s a great deal of financial wisdom at a fraction of the price.
And even if you lowered your cost to $2,500 per month, you’d still bag a professional who’s knee-deep in your business almost every week.
Now, if you want the expertise of a CFO for a shorter-term stint, Acuity’s fractional CFO services start at an hourly rate of $275.
With fractional CFO services, you get top-quality financial advice, tailored to your needs and without the price tag of a full-time hire. That guidance makes a world of difference when you’re growing your business.
The right time to hire a fractional CFO depends on your startup’s unique needs and circumstances. And while a fractional CFO can be an invaluable asset for startups and growing businesses, many businesses jump the gun and hire CFOs too early.
Consider bringing a fractional CFO on board if:
- Your business is scaling rapidly
- Financial decisions are becoming more complex
- You’re planning for an IPO or acquisition
- You’re seeking external funding, or
- You lack in-house financial expertise
From strategic planning and financial modeling, to improving investor relations and tax services, fractional CFOs offer invaluable expertise in finance that goes beyond the books.
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.
Our CFOs adapt to your business’s specific needs – they don’t have a one-size-fits-all approach. Plus, they change their role as your business’s needs evolve.
Whether you’re a startup seeking to secure funding, a growing business needing to optimize cash flow, or a seasoned enterprise aiming for a significant financial milestone, our seasoned CFOs are ready to be your co-pilot on this exciting journey.
Ready to get started with a CFO? Schedule a call with our team today and discover how Acuity’s fractional CFO services can be your roadmap to financial success.
CFOs serve as trusted advisors, providing critical financial insights, mentoring the finance team, and executing various project services as required. They’re here to help you make sense of your numbers, and make smart business decisions.
Whether it’s time to hire a CFO or not, our team is committed to providing you with the perfect level of financial management services that are tailored to your unique business needs.