Fractional CFO, Part-Time CFO, Virtual CFO: What They Are and When You Need One
There are many terms bandied about when it comes to the position and outsourcing of a Chief Financial Officer (CFO). It is easiest to start understanding these terms by getting a firm handle on the role of a CFO.
According to Investopedia, a CFO’s responsibilities in a broad sense include:
- A CFO is responsible for a company’s past and present financial situation and is an integral part of a company’s management and financial future.
- A CFO has multiple duties, from financial reportage to deciding where and when to invest company funds.
- A CFO oversees the capital structure of the company, determining the best mix of debt, equity, and internal financing.
- Addressing the issues surrounding capital structure is one of the most important duties of a CFO.
Simply put, a CFO oversees the financial health of a company and plays a major role in expenditure decisions and initiatives based on financial metrics, not emotion. This level of responsibility comes with a hefty price tag. According to Salary.com, “The average Chief Financial Officer salary in the United States is $393,377 as of May 27, 2021, but the range typically falls between $299,442 and $499,992.”
Many small businesses cannot afford to have a full-time CFO on staff. However, it is crucial that they receive the same assistance and guidance when making decisions of all kinds. This is where a Fractional, Part-Time or Virtual CFO comes in.
Fractional | Part-Time | Virtual
Though the terms may be confusing, they are all names for an outsourced CFO (vCFO). This means your company gains the benefits and insights from a professional financial officer at a fraction of the cost you would pay for a full-time hire.
Below are just some of the questions a vCFO can help you answer:
- Should I add this product/service?
- Can I afford to hire new staff?
- Does it make sense to purchase new equipment?
- How can I reduce my accounts receivable?
- How will future tax law changes affect my business and how can I prepare?
- What Key Performance Indicators should I be tracking?
- How can I forecast for the future?
- Can I afford health insurance for my employees?
- Is my company structured correctly?
- What do I need to do to prepare my business for acquisition?
- Will my business be able to fund my retirement?
Your vCFO team will work with you on a schedule either through online meetings or in person. For example, Fates, Bodily & Parker offers both options depending on your business location. Your vCFO team should tailor your engagement to fit you needs and budget.
If you are interested in learning more about our vCFO services, please contact us.
Our team will work with your business and provide the services you need. Some examples of the areas we can assist you with:
- Strategic Planning
- Growth Planning
- Budgeting and Forecasting
- Customer Invoicing
- Resource Management
- Tax Forecasting
- Cash Flow/Proforma Planning
- Establishing Financial Processes
- Exit Planning
Contact us for a free consultation.