What differentiates a fractional CFO from a normal CFO is that the fractional CFO provides the CFO services in a firm in a part time fashion or on the basis of a contract. Providing the CFO services in a part time way is a cost effective way for firms to get the expertise of a fully fledged CFO with lesser pay rates and additional allowances that a full time CFO might charge. A full-time CFO who looks after the financial strategies and other aspects of a firm, the responsibilities of a fractional CFO are on a project basis and more focused on specific company milestones.

Functions of a Fractional CFO for a company

Fractional CFOs are required where a company has to tackle their financial challenges within a specified period of time. These can be related to a company’s growth, strategies, executing systems, even finding the way through an audit or a general transaction. Therefore, the hiring of a CFO is more suited for small scale companies. Let’s discuss the duties of a fractional CFO in detail.

Overcoming Specific Obstacles

A fractional CFO is often approached by an organization when there are immediate financial challenges faced by a firm and they don’t have the relevant skills or alternative of the expertise provided by a CFO. This is because in the smaller firms, there is an absence of a dedicated CFO. Or if a company has a dedicated CFO then in that case, the company can ask the fractional CFO to partner with the fractional CFO and solve the problems as quickly as possible. Following are some of the problems that a fractional CFO can provide solutions for:

• Cash flow problems
• Managing Expenses
• Cost cutting
• Processing an audit
• Decluttering existing systems
• Balancing gross margins

Building a prosperous financial future

Fractional CFOs are responsible and highly effective in building a prosperous financial visibility. This is because many important financial designations such as accountants, bookkeepers are responsible for looking at the past and current finances of a firm. Therefore the financial future of a company is often overlooked.

A fractional CFO assists a company to find out where the company currently stands and take them to the financially prosperous positions they want to achieve. Growing a firm from a small scale to a larger firm requires the efficient use of capital. One of the most important jobs of a fractional CFO is providing a financial plan that will be at the forefront of the company's financial practices and help them achieve immense growth in a well rounded efficient way.

By looking at a company's short term, mid terms and annual business forecast, a firm can better anticipate risky outcomes. As this can be used to analyze the upcoming difficult times, and find out ways to make successful investments. Following are some of the additional benefits that a firm can get from a fractional CFO:

• Create financial forecasts
• Formulate the budgets based on estimations
• Do risk analysation in terms of products, market competition and services.

Growing a firm with fractional CFO

One of the more sought after qualities of a fractional CFO is their assistance in helping a business expand without making complex errors. It involves providing the much needed tools, doing speculations, and managing communications with company specific vendors. This helps in managing the ever growing demands and needs of the business firm and simultaneously provide value to a diverse set of consumers. This is why a fractional CFO can be thought of as the bridge that helps a firm grow from a small scale to a larger base of operations. It's important because upon expansion most businesses are unable to meet the higher threshold of demands and therefore a deficit in revenue is observed. Here are some of the duties of a fractional CFO in terms of expanding a firm:

• Streamline the pathway for the personnel and create guidelines for the perfect next candidate.
• Develop strategies and systems that can provide significant improvement.
• Work on improving the reach and calculation capabilities for processing large amounts of raw data into meaningful information.
• Identify the causes of loss of revenue, cost overgrow and friction in operations that is not healthy for a growing firm.