The Fractional CFO Concept (Part 2)

Earlier this week I introduced what may have been a new concept for some small business owners and managers; the idea of fractional or part time CFO. A vacation timeshare is a useful analogy to understand how and why a part-time financial expert may be the perfect solution for your needs.

I conclude this topic with a few frequently asked questions.

  • What exactly does a CFO do, and how does that change if I use a fractional CFO?

The chief financial officer or CFO is the person primarily responsible for managing the overall financial operations of an organization. This position is responsible for planning, cash flow management, record keeping, financial reporting, etc. The only difference between a traditional CFO and a fractional CFO is the nature of their relationship to the business. While a CFO is full time officer and employee, a fractional CFO is a part-time, independent contractor. However, their duties and responsibilities are virtually identical.

  • Will I retain a fractional CFO for a one-time assignment, or will they continue to provide on-going services?

Occasionally, a client will request that that their fractional CFO provides services for a one-time, special project. The CFO will likely endeavor to accommodate all client needs. However, their primary focus will be on providing on-going fractional CFO services, including the development, implementation and monitoring of a long-term business plan. While the time allotted to this process can be adjusted and even reduced as initial objectives are met over time, it is a continuous process that typically requires some effort at least monthly and probably weekly.

  • How much should I expect to pay for my fractional CFO?

The cost of fractional CFO services are primarily determined by only two things, the number of hours spent on an account, and the billing rate of individual providing client services. Barring temporary or emergency situations, a reputable fractional CFO firm will endeavor to staff assignments using associates with skill sets and experience levels appropriate to your needs. Ultimately, they will provide the level of service you determine based on your needs and within a budget determined by you. Your schedule can vary from just a few hours per month to several days per week, and can be adjusted as future needs require. Typical clients should expect to spend from $500 to $10,000 per month, depending on the two factors.

  © 2012 by Dale R. Schmeltzle

 

Be Sociable, Share!

Speak Your Mind

*

  • RSS
  • Newsletter
  • Twitter
  • Facebook
  • LinkedIn