Every business needs expert financial guidance, whether it’s a fresh startup or established company. If you hire a fractional CFO (chief financial officer) and other fractional executives, you can receive dedicated financial guidance without spending money on a full-time employee.
When it comes to finding fractional executives, talent companies like Paladin offer a variety of services to suit each business’ needs. So, once you figure out your budget and the areas you need help in, finding a suitable CFO is an easy process.
There are many reasons to hire a fractional CFO, and this article will discuss how it could help your business in more detail.
1. Hire a Fractional CFO for Outside Perspective
When it comes to hiring a fractional CFO, one of the main benefits is the lack of bias involved. Getting an outside perspective on the financials of your company ensures you receive honest and helpful feedback, as the fractional CFO has no internal ties to the business.
On the other hand, a full-time CFO might have more personal ties to the business, such as developing personal relationships with management and stakeholders. A fractional CFO will solely give advice based on the facts given and is unlikely to know anyone within the business, which could affect planning and decision-making.
2. Specialized Skills and Knowledge
Fractional CFOs are talented, experienced individuals who are experts in their field. In many instances, these professionals work with various types of businesses under different circumstances, meaning they can work under challenging conditions.
Their specialized skills and knowledge will be helpful for growth management, audit preparation, and any other areas your business needs financial guidance in. It’s best to hire a fractional CFO with previous experience in your industry to ensure they have the specialist knowledge required for the job to be fully successful.
3. Fewer Expenses
Hiring a full-time CFO is expensive and not always ideal for startups or companies with smaller budgets. Having to pay a full-time salary and benefits can make up a significant portion of your costs, thereby reducing profits and causing added stress.
On the other hand, a fractional CFO essentially works on a freelance basis, meaning you only need to pay them for the work they do.
As a result, you can reinvest the savings into your company or enjoy the added profits.
4. Greater Flexibility and Scalability
If you hire a fractional CFO, you will have the freedom to work with them for as many hours as is needed. For example, one day a week might be enough initially.
However, as your business’ needs change, a fractional CFO can take on more hours to improve operations and match the company’s demands. Additionally, a fractional CFO can take on fewer hours if the business goes through a period of stagnation, which wouldn’t be possible with a full-time CFO.
On top of that, many fractional CFOs can work remotely, meaning you have access to them even if they’re not in your region.
5. No Long-Term Commitments
Hiring a full-time CFO is a serious commitment with many strings attached and responsibilities to consider. Companies in the early stages of growth with small budgets should consider fractional CFOs because they’re not tied to the businesses in a long-term manner.
For example, if you hire a fractional CFO and realize they’re not a good fit, you can simply pay them for the work they’ve done and move on. You don’t have to worry about things like severance packages or long notice periods, so you can save a lot of money if it ends up being the wrong choice or your business’ needs change.
Hiring a fractional CFO can help your business cut costs, increase flexibility, gain access to expert knowledge, and steer clear of long-term commitments. It’s a perfect choice for a company that needs financial guidance without the financial burden of hiring a full-time employee.