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Role of Fractional CFO for Your Startup

By January 17, 2020 No Comments

Description: Fractional CFO is a person that can bring your startup on a higher level, analyze all the finances and let your company grow faster.

In recent years, the professional skills of the financial director have become increasingly focused on the implementation of strategic rather than operational functions like in the case with spielekostenlos. Due to the active introduction of information technologies in all areas of business, the list of necessary skills continues to be transformed and replenished with new items. Initially, the functions of CFO were limited to accounting, payment management, etc. But now they have reached the next level – planning, forecasting, business process management.

However, not always a full-time employee is able to cope with all the challenges, especially when it comes to a startup and the right direction of its development. In such a situation, it is now customary to hire a fractional CFO. And now we’ll figure out what the advantages of such hiring are.

Such a specialist may have more opportunities to help startup founders, even if he will work on a part-time basis and remotely. Thus, the company can significantly save on the salary of a full-fledged financial director.

As practice shows, the fractional CFO is hired for a project to achieve certain goals. Besides, such a person should be able to solve current financial problems and invent financial growth mechanisms for the company. The matter is that he is not just an accountant, but a strategist and controller in some way.

Duties of Fractional CFO for Startups

Fractional financial directors can work on several projects at once, where help is needed in financial planning, accounting and building business strategies for the future. That is, such a specialist in most cases will be able to solve those problems that full-time specialists cannot cope with, as they lack experience and knowledge. Fractional CFO will become one of the main startup benefits.

Plans on Growth

Unfortunately, many business owners increasingly notice that their CFOs spend a lot of time analyzing transactions that have already taken place and on ongoing financial management. That is, they are literally unable to look ahead and predict even the nearest future of the company in terms of finances. Therefore, a fractional financial director is a godsend for startups who want to be successful. A well-developed financial strategy is a path to success.

A fractional CFO is always a person from the outside. He clearly analyzes your past, present and plans the future development of your business startup in the most reliable way. Therefore, if you plan to cooperate with such a person, be prepared to develop a development plan for several years to come. Thus, you will receive a real development plan including recommendations on the search for additional financing and lending.

Cash Flow Improvement

Another advantage of hiring a fractional chief financial director is that he will analyze and provide information to the owner about all the cash flows of his company. It is very important to understand where they come from and where they go. This information will still be needed by potential investors. A detailed analysis will help to develop a detailed development plan for the future.

If you are directly interested in understanding how a budget leak occurs and how to minimize it, then this is your option. You can always create some kind of innovative plan based on the analysis and startup growth strategy.

Effective Cost Saving

If you are not an expert in finance, then it will certainly be difficult for you to find the right way to help reduce costs. After all, usually financing startups at the initial stage is very limited. A correctly selected fractional financial director will help reduce risks to a minimum and help pave the right path to a profitable business. Such a person is very objective in his assessments, which is not particularly characteristic of internal financial directors.

Business Acquisition Analysis

If you are thinking about running a startup and want to buy some business, it is important to understand all the risks. The CFO will help you make the right decision and based on his analysis, which is impartial. if you limit the preparation process correctly, success will be guaranteed there. Indeed, a truly experienced financier will evaluate all the financial performance of the company, analyze the market and deliver you the verdict. If suddenly you do not have enough funds for such a purchase, then there is always a chance to take a loan or get the missing amount of money in debt. During the loan period, the financial director will also be able to advise you. 

Growth Strategies

It is generally accepted that the founder and owner of a startup should deal with the growth and development of a company, but this is not entirely true. If you hire a fractional financial director, he will be able to quickly and efficiently deal with this issue. The modern CFO will use cost analysis to attract customers and analyze the value of the life cycle of clients to develop indicators. An example is the analysis of the return on investment in marketing and the search for possible ways to reduce the cost of attracting customers. CFOs always take the lead when it comes to strategies and planning. They will provide you with short-term and long-term forecasts and help improve the financial situation of your business startup. Some experienced people also help with task priorities in terms of finances.

To summarize, it should be noted that such an employee as a fractional CFO has a lot of advantages, especially when it comes to developing a startup. For owners who plan to expand their business, detailed financial analytics and forecasts will be very appropriate. In addition, if a full-time employee of this level is beyond the budget of the company, hiring a fractional chief financial officer will help to win in costs. Understand one thing, if you want your company to develop, be successful and prosperous, it is almost impossible without such a person. Hopefully, the information above was helpful for you. If you have any questions or would like to share your opinion, you are welcome!

 

Author’s Bio: Thomas Glare is an experienced CFO, working simultaneously in several companies that need financial assistance. He is an expert in financial operations and helps guiding startups and already mature companies how to deal with money they receive and spend. Business plans for startups, forecasting, and analysis are his primary responsibilities.

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