After a Pandemic Pivot, Take a Proactive Approach with a Fractional CFO

The rollercoaster ride of COVID-19 has been difficult not only for businesses but employees as well. The pandemic has forced business owners to meet crisis navigation head on. When the coronavirus crisis hit, businesses were in survival mode and had to, in a sense, “triage” the situation. In the high-stress environment, many companies streamlined processes by reducing headcount and even whole departments. This has required current personnel to shift job responsibilities and even take on new ones altogether.

As a business owner, most of your time is focused on operations, while relying on others to ensure the finances are in order. Your business may be a size in which the internal accounting function is given to one or two individuals who have some experience with finances and possibly past experience as a controller or accounting manager. Perhaps this works for your situation. Or perhaps those employees lack the resources and experience needed to ensure the company is moving in the direction it should be. Internal accounting staff can often get stuck in the weeds of historical data. If that's the case, this means your business is reacting to its current environment and not taking a proactive approach in order to thrive.

Your company has unique needs. Executives should be consistently taking inventory of what is working, what is not, and what is mission critical during this "new normal." Having skilled financial professionals in your corner to navigate budgets, streamline processes, efficiently complete financial projects, and provide accurate data that your business needs is key.

If you want to take a proactive approach and start developing ways to elevate your business, you might consider engaging a fractional CFO.

What is a Fractional CFO?

What are fractional CFO services, and what do they entail? Business owners often ask this question when situations take shape and a company is facing a financial challenge, trying to achieve growth, implementing systems, raising capital, or navigating an audit or specific transaction.

A fractional CFO (also known as an outsourced CFO) is someone with decades of experience servicing publicly traded and privately held companies in a part-time capacity, either on retainer or more typically on a contracted basis. A fractional CFO has a high-level of financial expertise and can assist businesses with a variety of strategic and financial needs and issues. This finance expert can weigh-in on important business decisions and deliver value by tracking key metrics and always looking forward.

In simple terms, a fractional CFO is someone who can come into your business, provide in-depth knowledge in areas that may require technical expertise, and do so without the in-house costs, salary, benefits, or bonuses of a full-time CFO.

What Can an Outsourced CFO Help Your Business With?

When it comes to helping your business, a fractional CFO can:

Address Specific Concerns for Your Business

Oftentimes, businesses will bring on a fractional CFO when there are specific concerns that the company's existing team does not have the skill set or resources to overcome. The concerns may include:

  • Streamlining internal control processes
  • Creating or improving cash flow management
  • Raising outside capital in order to accomplish company initiatives
  • Identifying efficient and effective ways to increase profitability
  • Developing an efficient budgeting process that enables a successful long-term financial roadmap
  • Navigating a third-party audit

Assist with Growth

Whether you’re a newly formed startup or a well-established company, scaling the business takes time and experience to do it correctly. An outsourced CFO experienced in this area can help an organization find ways to drive profitable growth and put a plan in place to ensure the growth is sustainable over time as the business grows more complex.

A core principle when scaling a business correctly is to optimize your resources — in other words, figure out how to grow revenue while keeping operating costs low. This all starts with having a cohesive vision for your systems, staffing, and process. The correct staffing plan is essential and must be in place for a minimum of 12 to 18 months. Having a CFO who not only has the expertise and enthusiasm for the business but can also adapt to the everchanging needs of the growth startup mindset is a must. As the business is scaling, new team members will join the company, and you will want an experienced CFO in place to ensure the core values and culture of the organization are maintained.

A fractional CFO will use proven tools, methods, and processes that will leverage existing vendor relationships to deliver value to an increased customer base.

Accomplish Goals

If a company is aiming to raise capital or preparing for a sale, merger, or acquisition, an outsourced CFO can get your books in order, analyze contracts, and assist with strategic relationships.

At the start of an engagement with a fractional CFO, you should sit down with your decision makers to ensure that you set objectives and create a timeline. Goals — both short and long term — require a vision and the know-how to not only accomplish the goals but also measure progress. A fractional CFO can adjust or rebuild reports, come up with the best key performance indicators (KPIs), and hold everyone accountable.

Are You Ready to Engage a Fractional CFO?

Delap's business advisors take a holistic approach when partnering with companies to provide fractional CFO services. Our experienced personnel will provide the guidance you need to align your goals and elevate your business. Learn more about our fractional CFO services.

Schedule a call with a Delap business advisor today