The CFO'S Perspective

A new breed of finance professionals is emerging, known as fractional CFOs."

In the ever-evolving world of finance and business, the role of the Chief Financial Officer (CFO) has undergone significant changes. Gone are the days when CFOs were primarily responsible for managing a company's finances in a traditional 9-to-5 role. Today, a new breed of finance professionals is emerging, known as fractional CFOs. These individuals are redefining the traditional CFO role by offering their expertise on a part-time or project basis to multiple companies. If you're considering a career as a fractional CFO, this article will provide insights into the role, the benefits, and what it takes to succeed in this dynamic field.

What Is a Fractional CFO?

A fractional CFO, also known as an interim CFO or part-time CFO, is a financial expert who works with multiple organizations on a contract or project basis. Rather than being a full-time employee of a single company, a fractional CFO offers their financial expertise to multiple clients. This arrangement allows businesses to access high-level financial management and strategic guidance without the cost and commitment of a full-time executive.

What do you need to think about when transitioning a portion of your business from a B2B model to a B2C model?

This type of major strategy shift requires a full-scale examination of every facet of the organization – sales, marketing, operations, manufacturing, supply chain, logistics, and R&D. It is wide-reaching and comprehensive, rippling through everything that comprises what you sell, how you make/acquire it, and how you sell it.

When you need to hire a Controller, what should you look for? What do you really need and what is just nice to have?

Obviously, as the person who will have ownership over your entire accounting operation, you need someone that is disciplined, focused, and organized, but what else? Your Controller should be a strong accountant with a tactical focus and solid track record of reliable performance, but their resume should not end there. When you are looking to bring in a Controller, find someone who will also:

Over the last decade it has gotten harder to understand and evaluate the indirect cost rates being applied to grants. Nonprofit leadership has struggled to keep up as the requirements and recommendations around indirect cost rate calculations have shifted and changed. And yet, this work remains critically important to the effective financial management of nonprofit organizations because without accounting for indirect costs correctly nonprofits cannot cover their overhead.

Unless the expense of overhead costs such as rent, utilities, technology, and payroll are recouped through funding, an organization cannot be fully compensated for what it costs to run the programs that they offer, jeopardizing their ability to offer not only those programs but maintain other vital initiatives in the community as well. Therefore, properly calculating indirect cost rates is a cornerstone of effective grant management for nonprofits.

Are you thinking about selling your business? Some business owners hear this question and respond, “No… well, not any time soon anyway.” But, if the answer is yes, even if you don’t plan on selling it soon, the time to start planning is now. If you think that selling your business might be in your 3-year, 5-year, or even 10-year plan, start getting the pieces in place now. Preparing ahead of time makes the process go more smoothly and quite often helps owners to get more value out of the sale of their business.

It’s never too early to plan for selling a business because there are a lot of steps that need to happen before coming to the table to sign the paperwork. Getting your financial house in order involves cleaning up your books, assessing the overall financial health of your business, putting together the information that buyers will need to enter into an agreement, working through the details of the deal, and then closing out the sale. From the early planning stage to final sale completion, the whole process can take several years to complete.

Sometimes in our professional lives we do things because we think they are a smart business move. Sometimes we act because we have no choice because the market demands it. Sometimes we take positions or actions because we are thinking about our company’s ethos and reputation in the community.

Every now and then, those things are at odds with each other. And other times, they align perfectly.

Paying attention to and acting on diversity in your business is one issue that can help you align all those facets of your business. It can help you show the world (your employees, clients, and potential customers) who you are, what you value, how the way you value people and business shows up in your work. It can also help you refine your thinking and actions to make all that public positioning real!

We’ve all heard about “phishing” – malicious emails. As Microsoft notes below, they’re hugely popular among cyber thieves. They also happen to be hugely lucrative (which is why they’re so popular!).  

While some nonprofits have been dealing with cash deficits over the last few years, others have experienced the opposite – too much cash! Granted, this “problem” is a much better one to have! However, it still poses a question that needs to be answered strategically to ensure a healthy future for the organization: “What do we do with the cash we’re sitting on?”

Of course, nonprofit leaders can choose to do nothing and just hold onto that cash until their hand is forced and they need to use it. Unfortunately, this approach poses two threats:

1. Not utilizing available cash to make strategic moves can cause an organization to miss out on key opportunities for growth, reducing its long-term effectiveness.
2. Sitting on cash gives the impression that the organization does not really need the money, which can diminish future giving from donors. Afterall, if an organization already has more than they need, why would donors keep writing the big checks?