Whether a small business owner juggling a tight budget or a corporation handling hundreds of employees, running a successful company takes time, money, and the correct talent – talent that’s needed for new positions and to help support existing roles, and which can be hard to find in today’s fluctuating workforce.
This is where fractional c-suite members, such as fractional CFOs, can help provide stability and confidence for businesses as they question if they are prepared for a recession.
In general, a CFO’s top priorities include handling a company’s cashflow, keeping the strategic plan focused and on budget, and spearheading financial planning, reporting, and analysis efforts. For many companies, financial operations can be difficult to manage for a number of reasons, but mainly due to ever-changing business environments and time constraints. Fortunately, outsourcing CFO needs via a fractional CFO provides a huge benefit for businesses struggling to keep their focus on strategic initiatives and providing consistent financial leadership.
Benefits to businesses—large or small
Small to medium-sized businesses tend to face the same issue — they do not have the funds to hire a full-time CFO. In addition, most of these businesses do not have the skillset or bandwidth to handle complex financial issues. A fractional CFO, however, could handle items like key customer negotiations or finding a new banking partner for a fraction of the cost of employing a full-time CFO, allowing that company to focus on the entrepreneurial side of the business.
For large businesses and corporations, money isn’t so much the issue as time is. Handling a large roster of employees in addition to managing the services/goods they provide can rob many executives’ attention from key strategic or essential projects. Hiring a fractional CFO to support an acquisition or fill in after the departure of a previous CFO provides larger entities the time to focus on the plethora of other weekly operations to keep things moving smoothly.
The current economic state and its effects
As our current economic state continues to drive a dynamic business environment across the nation, many businesses are also facing additional stressors. Inflation resulted in the increased prices of products and services, meaning companies are paying suppliers more for the goods they need. In response, many businesses are tightening their belts and searching for ways to maximize their funds. A fractional CFO offers the exact expertise these companies need, with the ability to spot where the economic efficiencies are and where money is going down the drain.
In the same vein, several businesses are experiencing supply chain problems catapulted by the pandemic and exacerbated by inflation. Company inventory is currently sitting in many businesses’ warehouses, costing them hundreds to thousands of dollars to store. Fractional CFOs can even help with this issue, having the knowledge and power to change and implement billing practices, understand where demand is, explore the cost of storing inventory for prolonged periods of time, and much more.
The goal: driving value
Ultimately, hiring a fractional CFO drives company value. A fractional CFO will not get lost in the day-to-day detail of the business, but focus on processes, tools, and strategies to improve company performance and profitability. Firms like Rehmann boast a robust fractional CFO practice group, offering clients the opportunity to work with skilled professionals and their team whenever they are needed — from project-based work or longer-term, fractional relationships. Whether it’s help needed with overhead absorption to implementing a new ERP system, fractional CFOs bring a multitude of skillsets to the table that is a fraction of the cost of hiring in-house.
Contact Rehmann Principal Tom Shemanski at [email protected] or 517.841.4266.