Money, get away
Get a good job with more pay and you’re okay
Money, it’s a gas
Grab that cash with both hands and make a stash
These lyrics from Pink Floyd’s song “Money” might resonate with many accounting entrepreneurs who are looking for ways to grow their firms. But money is not just about making it, it’s also about managing it wisely so the first question that comes around is: How much does it cost to hire a CFO today?
With record turnover and staff shortages, some roles have seen salary offers increase by as much as 25% in recent months. And that’s where a fractional CFO can help.
A fractional CFO is an experienced Chief Financial Officer who provides services for startups on a part-time, retainer, or contract basis. This offers a company the experience and expertise of a high-end CFO without the in-house cost—salary, benefits, and bonuses—of a full-time CFO1.
What Does a Fractional CFO Do?
Unlike a full-time CFO who oversees and maintains all general financial strategy or an interim CFO who performs CFO duties before or between CFO hires, a fractional CFO’s duties are typically on a project basis and specifically tuned to the company’s particular challenges or goals1.
Fractional CFOs most commonly partner with companies to help overcome financial challenges, achieve growth, optimize strategy, implement systems, raise capital, or navigate an audit or transaction1.
Some of the common tasks that a fractional CFO can do for a company are:
- Develop detailed short-, mid-, and long-term financial forecasts
- Prepare budgets based on forecasts
- Analyze potential future products, services, markets, and customer segments
- Manage the startup’s financial reporting
- Create and monitor key performance indicators (KPIs) and financial metrics
- Implement or improve accounting systems and processes
- Ensure compliance with tax laws and regulations
- Negotiate contracts and deals with vendors, customers, investors, and lenders
- Provide strategic advice and guidance to the CEO and the board of directors
- Mentor and train the existing finance team
What Are the Benefits of Hiring a Fractional CFO?
Hiring a fractional CFO can provide many benefits for startups that need high-level financial expertise but are not ready or able to hire a full-time CFO. Some of the benefits are:
- Cost savings: A fractional CFO can save a company up to 80% of the cost of hiring a full-time CFO. A fractional CFO typically charges an hourly rate or a fixed monthly fee depending on the scope and duration of the project. This allows the company to pay only for the services they need, when they need them.
- Flexibility: A fractional CFO can adjust their availability and involvement according to the changing needs of the company. They can work remotely or on-site, part-time or full-time, for a few months or a few years. They can also scale up or down their services as the company grows or faces new challenges.
- Experience: A fractional CFO is an experienced finance leader who has worked with multiple companies in different industries and stages of growth. They bring a wealth of knowledge and best practices that can help the company avoid common pitfalls and accelerate their success. They can also leverage their network of contacts and resources to provide additional value to the company.
- Objectivity: A fractional CFO is an independent contractor who is not emotionally attached to the company or its founders. They can provide unbiased and honest feedback and advice that can help the company make better decisions. They can also challenge the status quo and bring fresh perspectives and ideas that can spark innovation.
How to Find and Hire a Fractional CFO?
Finding and hiring a fractional CFO can be challenging, as there are many factors to consider such as:
- The specific needs and goals of the company
- The budget and timeline of the project
- The qualifications and track record of the fractional CFO
- The compatibility and chemistry between the fractional CFO and the company culture
Here are some steps that can help you find and hire a fractional CFO:
- Define your needs and expectations: Before you start looking for a fractional CFO, you should have a clear idea of what you want them to do for your company. You should identify your pain points, challenges, goals, and desired outcomes. You should also determine your budget, timeline, and preferred mode of communication.
- Search for candidates: There are several ways to find potential fractional CFOs for your company. You can ask for referrals from your network of peers, mentors, advisors, investors, or other entrepreneurs. You can also use online platforms such as LinkedIn, Upwork, Toptal, or Kruze Consulting that connect startups with vetted fractional CFOs.
- Evaluate candidates: Once you have a shortlist of candidates, you should evaluate them based on their credentials, experience, portfolio, testimonials, references, and personality. You should look for someone who has relevant industry knowledge, proven track record, strong communication skills, and a compatible work style. You should also check their availability, rates, and terms of service.
- Interview candidates: The next step is to interview the candidates to get a deeper understanding of their skills, expertise, approach, and fit. You should prepare a list of questions that cover topics such as their background, motivation, methodology, expectations, and success stories. You should also ask them to provide a proposal or a sample of their work that demonstrates how they would tackle your specific project.
- Hire the best candidate: After the interviews, you should compare and contrast the candidates based on their strengths, weaknesses, and potential value to your company. You should also consider your gut feeling and intuition about who you feel most comfortable and confident working with. Once you have made your decision, you should formalize the agreement with a contract that outlines the scope, deliverables, milestones, payment terms, and confidentiality clauses.
Conclusion
Fractional CFO services can be a valuable option for startups that need high-level financial expertise but are not ready or able to hire a full-time CFO. A fractional CFO can help startups overcome financial challenges, achieve growth, optimize strategy, implement systems, raise capital, or navigate an audit or transaction.
However, hiring a fractional CFO is not a one-size-fits-all solution. It requires careful planning, research, evaluation, and communication to find and hire the best fractional CFO for your company.
If you are looking for fractional CFO services, you have two options:
- You can hire BradyCFO, a reputable firm that provides fractional CFO services for startups. They have a team of experienced and qualified fractional CFOs who can help you with your financial needs.
- You can hire an offshore employee with Vintti, at 40% lower cost than comparable US talent from cost-effective countries. We can help you find and hire an in-house CFO who can work with you on a permanent basis.
Whatever option you choose, you can rest assured that you will get the best financial support for your startup.
Kevin Mitchell, CPA
Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.
