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  • Writer's picturePeter Geh

7 Key Things a Modern Fractional CFO can do to Help your Business

Updated: Apr 11

Fractional CFO

A lot of businesses operate just fine without a CFO. However, maybe "just fine" isn't good enough. What if your business is leaving opportunities on the table or you are focusing on things that aren't in your wheel house? Maybe your time could be spent on tasks that could really move the needle for your business or maybe you are taking unnecessary risks. Consider these 7 key things a modern fractional CFO can do to help your business. And yes, I did say fractional since gone are the days where a CFO is strictly a full time gig or position reserved for only the largest of companies. As always, if you have a question or think you might want to work together, please get in touch through my Home Page. Also, never miss a blog by following me on LinkedIn or Facebook.

1) Increased Credibility Raising Money or Securing Financing

CFO's are highly educated and experienced financial professionals. When raising capital or securing financing, they can help you tremendously with the process, however, their sheer presence alone can increase the potential for success. This is because potential investors and financers can feel more comfortable when they know a CFO has helped you out as a trusted advisor along the way. In addition, capital or financing success can be bolstered when projections and applications are more professionally laid out with the help of an expert.

2) Shake Up Group Think

Group think is when you have executive or management teams that have been working together for a while and ideas and strategic thinking are starting to be formed collectively. Group think begins to affect critical thinking and individual responsibility in a negative way. Group think can also limit strategic planning and risk management. A fractional CFO can help break up group think by injecting new ideas and questioning strategic direction.

3) Improved Cash Management

A fractional CFO can greatly improve your businesses cash management. This is especially true if your business is small or new and lacks key finance department staff such as a controller. CFO's typically have vast experience working with businesses so they can help implement best practices throughout your finance department.

4) Help Steering the Ship

Having a fractional CFO as a trusted business advisor to complement your skills and management team can help steer you and your team into sound strategies that minimize risk. According to Fundera, 50% of all new businesses fail in the first 5 years and 70% fail within 10 years. Businesses fail early because many critical decisions around product-market fit, capital raising, product or service development, etc happen in those first 5 years. Critical errors with a few key decisions can spell disaster. With the proper team in place tackling those decisions, which could include a fractional CFO, your business stands a better chance of succeeding.

5) Getting your Finance Department past the "Measurement" Stage

Your finance department should be accurately measuring, understanding and improving your businesses capital flows. Unfortunately, a lot of finance departments don't go further than accurately measuring capital flows. In other words, they don't help business owners or management teams understand and most importantly improve capital flows. A fractional CFO can help proactively improve finances through insightful recommendations, trend analysis and action plans.

6) Help telling the Story through Numbers

Financial projections are critical to businesses both new and old. Where has your business been, but more importantly where is it going based on your strategy? A fractional CFO can help tell your story through projections 3 to 5 years out at an expert level. A fractional CFO's projections will be supported through reasonable assumptions and will also encompass thoughts and experiences from the entire management team. A good financial projection is also updated routinely. Projections can be used as a measuring stick for corporate success (or a budget) or funding opportunities.

7) Improved Risk Management and Control

In fast paced organizations or in challenging times, often risk management, compliance, regulatory, or legal matters get left to be dealt with later or are ignored altogether. A modern fractional CFO can help catch the things that shouldn't be skipped or left for another day because the consequences could be dire. While not the primary function of a fractional CFO, a modern CFO's role is varied with this being an area a business can gain some coverage over since it is often not in focus.


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