What is a CFO?

Person holding sign with question mark in front of their face.

People are often introduced to us having no idea what a chief financial offer (CFO) does, let alone why they would need one. They typically have a bookkeeper or controller, who can handle day-to-day transactions, and a CPA firm who puts together their tax returns.

But when it comes to understanding and actively managing the financial health of the business or being able to accurately report on that financial health, they’re missing the mark. This becomes particularly important as a business grows and becomes more complex.

What does a CFO do?

CFO’s provide leadership on financial strategy. They convert the owner’s vision of the future into a financial plan, and they measure progress on that plan. They ensure that reporting accurately reflects the health of the business, and they can speak to those reports when communicating with key stakeholders like investors and lenders.

What is a fractional CFO?

For small businesses a fractional CFO is a great option. A fractional CFO is an individual with financial expertise, often from a variety of industries, who can bring their knowledge and experience to a small business at a fraction of the cost.

Think of fractional help as a permanent member of the team who provides a fraction of their time at a fraction of their cost, vs contract help who is typically filling a role for a specified period of time either to work on a special project or to cover for an absence.

How much does a fractional CFO cost?

Fractional CFOs can be especially practical for small businesses when they aren’t large enough to require full time financial expertise, and moreover, they can’t afford the six-figure salary that an experienced CFO requires. Fees vary from hourly rates to monthly retainers. It is important to interview candidates and find the right fit, both in terms of experience and personality and in terms of cost.

Having an experienced CFO who has the perspective of helping a variety of growing companies in multiple industries can be an invaluable asset to have as a small business navigates the challenges of growing, thriving and ultimately building value.