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Many business owners can relate to this narrative: As a business scales, you become aware that your business needs a financial consultant. The financial needs of your business have far bypassed the expertise that yourself and your bookkeeper have. Naturally, you decide that a Chief Financial Officer (CFO) is likely what your business needs, but you can’t afford the salary of a full-time CFO or a robust CPA firm. And…now you feel stuck.
Once upon a time, there wasn’t really a solution to this problem. Business owners were forced to bootstrap their way along until they could afford a full-time, experienced CFO or could afford the price-tag of a full-service, robust CPA firm.
However, over the past two decades, specialized firms and service lines have emerged that meet this need. The role of the part-time CFO (also referred to as virtual CFO, fractional CFO, or outsourced CFO) was born.
What Does a Part-Time CFO Do?
Think of a part-time CFO as your business financial consultant. They will work with a team of accounting professionals to take care of “basic” accounting tasks such as looking for cost-savings, ensuring your books are properly maintained, making sure your taxes are paid on time, and completing other back-office accounting tasks such as accounts payables and receivables..jpg?width=597&height=373&name=Blog%20Post%20Template%20(38).jpg)
The real value of a part-time CFO is so much more. Your CFO will discuss your business goals with you and help you determine the financial milestones that will help you achieve those goals and increase profitability. From there, your part-time CFO will help you set KPIs and determine financial and non-financial drivers that will gauge whether you are on course to reach each of your KPI goals.
To make this process possible, your part-time CFO will use a mix of services: managing bank relationships, weekly financial meetings, budgeting, cash flow management, financial statements, business forecasting, companywide KPIs, financial strategy, financial reports, and other related tasks.
The financial forecasts your CFO provides will help you make sound business decisions that get you closer to your business goals. In addition, your advisor will help you generate scenario plans to determine how certain events within and outside your control would impact your business.
Below are a few additional services you can expect from your part-time CFO:
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Payroll Management
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Credit Card Receipt Tracking
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Business and Personal Tax Returns
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Strategic Planning
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Financial Models
When Should I Hire a Part-Time CFO?
Often, the time to hire a part-time CFO is when bookkeeping services aren’t enough any longer. Scaling businesses that have far surpassed the start-up phase start realizing that to achieve business goals, they need strong financial reports and trackable milestones. Some bookkeepers may have the experience to help with this process, but most don’t. That’s where a part-time CFO can help.
We often say that if your business is under $2 million in annual revenue, a bookkeeper or a small CPA firm is your best bet. If your business is over that $2 million mark but you don’t yet have the funds to hire a full-time CFO in-house, we’d recommend a part-time CFO. Part-time CFO services are a fraction of the cost of a full-time CFO while still offering the same accounting services and responsibilities as a traditional CFO.
If you’d like to learn more about our virtual CFO services, sign up for a free consultation. You can learn more about what we do, and how outsourced CFO services have helped clients just like you grow their businesses.
