I spent several years of my career serving as a fractional CFO for businesses not yet ready to hire an internal chief financial officer. Many of our customers at kept.pro were referred to us by independent fractional CFOs. Other customers are full-time CFOs who brought us in for extra support. So you might expect me to answer the headline question, Does my business need a CFO?, with a resounding Yes. In truth – it’s much more complicated than a simple yes or no.
What Is A Fractional CFO?
A fractional CFO, or fCFO, is an experienced financial executive who can provide high-level strategic support on a part-time basis. They’re an excellent stop-gap for businesses looking for expertise on a specific project, or even just a few hours of consulting a month. But just like a full-time CFO, fractional CFOs need access to accurate data to be effective.
I don’t care how large or small your organization is: Your business is only as viable as your data. It is impossible to make informed decisions without having accurate information. Much like AI models, the different insights or strategies that a fractional CEO can bring is dependent on the health of your data. The good news is that most of the data needed can be curated internally. The bad news – for some – is that means your data is only as strong as your internal accounting processes.
Accounting Accountability, Or Lack Thereof…
This is where I often tell clients that they’re not ready to hire a fractional CFO. They need the discipline of a strong accounting team instead. In my years working as an fCFO, it became abundantly clear to me that most businesses with a $2M-$30M annual operating budget do not have an accurate picture of their financials, and there was a significant amount of basic work needed to get there. And I saw a lot of these businesses were turning to fractional CFOs – and therefore overpaying – for the completion of accounting tasks such as troubleshooting journal entries, establishing separation of duties, or overseeing bookkeepers.
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Sure, good fCFOs may be qualified to take on those tasks. But that’s not what they’re best at, it’s not the best use of their time or expertise, and it certainly isn’t giving the businesses hiring them a lot of bang for their hard-earned bucks. This realization is what led me to establish kept.pro. I saw a gap in the marketplace for the kind of crucial accounting support needed to set a CFO up for success. You’ll get the most value from a CFO if you can leverage their strengths by presenting them with complete, accurate, and timely financials from a scalable accounting team, like the fractional teams we offer.
By helping you to understand and streamline your financials, we’ll build a more complete picture of the economic wellness of your business. This will enable you to:
- Make critical decisions about pricing, products, clients, projects, services, and locations
- Save time and focus on growing your business
- Protect your business from theft and fraud
- Avoid potential embarrassment with key stakeholders
- Engage in life-changing capital transactions
Once you have established this important foundation of financial data, you will have the information you need to make responsible, big-picture decisions.
Growing With Your Business
As we help to improve your internal accounting processes, kept.pro can evolve with your business. When you are ready, we can match you with an expert fractional CFO to provide strategic and forward-looking analysis. This will ensure your financial systems are healthy and ready to withstand your plans to scale, and the risks and growing pains that come with it. We can advise you on building an internal team once you have outgrown the need for our fractional services – or even support your advisory team in your successful exit.
Going back to the original question: Does my business really need a CFO (fractional or otherwise)? My answer is that I don’t know yet! What I do know is that this is something we can figure out together. With kept.pro, you will get honest, right-sized advice that makes the most sense for your business needs.
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Frequently Asked Questions
Does a small business need a CFO?
Businesses with less than $50M per year in sales can often find the financial expertise they require on a fractional basis. The sophisticated methods and insights available from fractional CFOs are built on quality financial data--which is often lacking in businesses this size. Start with a fractional accounting team and then engage a fractional CFO.
How do I find a fractional CFO near me?
If your accounting operations are squared away and you're in need of more sophisticated financial expertise on a fractional basis, then where do you look? Local organizations such as ProVisors, or trusted advisors you already work with such as an EOS implementer can be good places to find a fractional CFO with relationships in your community. Take care to vet introductions by looking at experience in your industry and their willingness & ability to add value in an introductory meeting. Don't hesitate to cast a wider net than your immediate area as most fractional finance work can be very effectively delivered remotely.
James Wheeler
https://www.linkedin.com/in/jamesdavidwheeler/James Wheeler has 15 years executive financial leadership experience in service and technology companies. He was a San Diego Business Journal CFO of the Year finalist in 2019. James was the recipient of multiple graduate fellowships at the University of California, San Diego, where he earned a BA in economics and an MBA, before complementing that with executive education at MIT Sloan. He has held several nonprofit and for-profit directorships and committee positions over the past 10 years.
