Why Should You Hire Fractional CFO Services?
There is a variety of reasons a small business would benefit greatly from a customized financial strategy, including:
- Your busy schedule does not allow you to perform accounting and bookkeeping.
- Predicting and forecasting have become too stressful and complicated.
- You are seeking vertical integration or emerging into a new market.
- You are switching your business plan and are uncertain of the outcomes.
- You are onboarding new equity partners.
- You are collecting outside equity capital.
- You have closed on an investment and must manage your cash correctly.
- Your cash is tied up in receivables or inventory, and growth is severely limited.
- You are seeking to refinance old debt and even get new debt.
- You are considering acquiring another business or merging.
In the end, it is best to discuss your needs and options with a qualified and experienced advisor, a finance professional, or your board of directors.
What Fractional CFO Services Can Small Businesses Benefit From?
Both full-time and part-time CFOs perform the same functions, including:
- Month-end accounting
- Regular bookkeeping
- Budgeting for the year
- Actual analysis vs. monthly budget
- Collaborating with management and using their financial expertise to create a strategy
- Negotiating and bargaining debt arrangements
- Cultivating relationships with lenders, investors, and banks
- Evaluating lifetime values and customer acquisition costs
- Collaborating with CPAs on annual tax filings
- Maintaining the value and due diligence for all business acquisitions
How Should I Choose a Fractional CFO?
Look for an Expert in Your Industry
Whether your tasks are financially simple or complex, you must look for an experienced professional. However, suppose you are involved in more financially complex businesses such as cannabis, technology services, medical services, transportation, marketing, real estate, construction, or distribution. In that case, you may require a specialty fractional CFO to handle your case best. Other markets like SaaS, consulting services, and retail often just need a qualified CFO professional.
- Consider Three Fractional CFOs
Interview your top three fractional CFO candidates with these questions in mind:
- Are they just a contractor, or will they be an integral part of our team?
- Do they understand your business and listen to your needs and concerns?
- Are they personalizing their recommended service list, or generalizing their “off the shelf” product offer?
- Attend Workshops
Before paying for any services, you should learn the fractional CFO’s business style and practice. So, attend workshops to gain a better insight of your candidates.
How Much Do Fractional CFO Services Cost?
Unfortunately, there is no definitive “one-size-fits-all” cost because the services will vary for each business. However, part-time CFO services typically cost anywhere between $150-$500 per hour. This price is affected by the number of hours the fractional CFO will quote you and the individual’s efficiency and task management.
Other significant factors that will affect the overall cost include:
- The size of your business. Per usual, a larger business will often require more work, thus driving up the cost.
- Your balance sheet’s complexity. Deferred revenue, multiple bank accounts, and inventory increase bookkeeping work and increase the cost.
- The potential outcome of the financial strategy. Your part-time CFO will have to work harder and more meticulously when making big business decisions. So, if they are studying your gross margins, analyzing the cost of growth, helping raise equity funding, and brokering a huge debt deal, be prepared to pay more than average.
- The services you and your business require. If you are like many other small businesses and already have your own bookkeeper or accountant, your fractional CFO can focus on other tasks such as forecasting and creating strategies, thus lowering your overall cost.
- The CFO’s team. It will be more expensive to hire a CFO with a team rather than an individual.
It’s also important to note that great fractional CFO consultations should never involve excessive quotes or unnecessary tasks. As you search for your next CFO, make sure you pay for the services you need and the right amount of work.
At Perpetual CPA, we operate based on two maxims:
1. Always strive to provide high-quality professional services and deliverables to our clients.
2. Always strive to provide more value to our clients than they pay for.
If you are looking for a qualified and experienced fractional CFO, contact Perpetual CPA today at (503)217-4114!
Located in Portland, Oregon, we are a full-service CPA firm working with clients nationwide. We offer a wide variety of services catered to assisting business owners, executives, and independent professionals from all over the country. You can trust our qualified and experienced team to handle your business affordably and efficiently every time. Call us today!