Benefits of a Fractional CFO

For small businesses generating less than $40M in revenue, it's typical to rely on a controller or bookkeeper to manage the accounting department. While small business owners excel as operators and salespeople, dedicating their time to day-to-day operations, client management, and team oversight, this often results in the delegation of critical accounting and finance functions to less experienced staff without sufficient oversight.

Controllers face hundreds of decisions each week, such as handling collections, allocating cash, accruing revenue and expenses, and negotiating vendor terms. It is unrealistic for them to consult the busy business owner for every decision. Consequently, controllers make judgment calls that, unfortunately, are sometimes undocumented, inconsistent, or misaligned with the business's overall strategy. These decisions can lead to cash flow issues, inaccurate financial reporting, and missed strategic opportunities.

A proficient CFO acts as the business owner's advocate within the finance and accounting department. They synthesize thousands of monthly transactions into key insights, review the General Ledger to ensure accuracy and support for each entry, and present concise financial reports highlighting critical takeaways and improvement areas. Beyond these tasks, a CFO develops budgets and strategic plans based on historical performance, using tools such as financial modeling and scenario analysis, to guide the company towards long-term growth and stability.

The best CFOs adopt an owner’s mentality, evaluating decisions as if they were the business owner. A successful CFO combines expert knowledge in finance and accounting, a deep understanding of business operations, and exceptional communication skills to effectively translate complex financial data into actionable insights. This rare combination makes them invaluable assets to any business.

But Why Fractional CFOs?

A small business typically requires an average of around 15 hours per week of CFO-level work. If a small business does have a full-time CFO, it is likely that much of their time is spent either performing lower-level work that can be performed by a bookkeeper, assisting with the business's operations, or scrolling through ESPN.

The average starting salary for a recent MBA graduate from a top business school is around $175,000, while a seasoned CFO can command double that amount at larger or private equity-backed companies. For small businesses, such salaries are often prohibitive and do not yield a sufficient return on investment.

Why should only large businesses or private-equity-owned companies have access to best-in-class financial talent? Fractional CFOs enable small businesses to access top-tier financial expertise without the associated full-time costs. This approach allows businesses to benefit from strategic financial guidance, improved decision-making, and optimized financial operations, all while maintaining budget flexibility.

At the Fisch Group, we connect small businesses with top Fractional CFO talent. Our team of Fractional CFOs is comprised of the brightest minds from leading business schools, trained in CFO best practices and equipped with best-in-class tools & technology. We embed these experts into your business, serving as your advocate and partner for all finance and accounting needs, ensuring you receive tailored, strategic financial guidance.

Interested in transforming your business’s financial strategy with a Fractional CFO? Contact us today to discover how our top-tier financial experts can drive your business forward. Fill out this form to get started and let us know how we can assist you!