Small businesses and startups often need assistance bringing their organizations to the next level. Unfortunately, the financial aspects of the business can become a roadblock if the company can’t afford a highly skilled chief financial officer, but a fractional CFO may be the answer.
Sanjay Gupta & Associates is a Plantation, FL-based, Indian-owned CPA firm that offers various services to companies throughout the area, including small business accounting, international tax services, and fractional CFO services. Consult the guide below to learn more about fractional CFOs and how they can help your small business.
What Is a Fractional CFO?
So, what does a fractional CFO do? A fractional CFO is a contracted or outsourced CFO who operates as a chief financial officer for a company without providing full-time CFO services. Instead, professionals in this field are c-suite level financial experts who provide financial insights to organizations that can’t afford to hire an in-house CFO full time.
Small business owners and startups tend to work with outsourced talent when they realize their businesses have strategic financial needs that their in-house employees cannot accommodate.
Examples of some of the work a Fractional CFO will perform include:
- Reviewing financials and refinancing options
- Consulting on new business plans
Small businesses that can’t afford or don’t need a full-time CFO can utilize fractional CFOs as informational resources. At Sanjay Gupta & Associates, we are a full-service accounting firm serving businesses in Plantation, FL. As a Certified Public Accountant with 30 years of experience, Sanjay Gupta is an expert in fractional CFO services at his accounting firm.
Benefits of Fractional CFO Services
While some CFOs remain with one company for years, others enjoy the flexibility of working with multiple organizations. Through outsourcing, these professionals develop skills across various industries like retail and manufacturing in a way that in-house workers cannot.
Their expertise in financial strategy and financial operations gives the companies they partner with a competitive edge. An accomplished fractional CFO like Sanjay Gupta can compare your financial reports, bookkeeping documents, and accounting software systems to others in your field and make improvements where necessary.
Helping Manage Growth
Business scaling refers to setting a solid financial foundation for businesses to grow over time without becoming overwhelmed with new clients, additional products, or excess funding. Scaling requires strong vendor relationships, tools, and processes. It also requires technology like SaaS or software as a service to accommodate the influx of new business.
A business transaction like opening a new company location or changes to regulatory requirements requires the advanced tools and techniques that a skilled fractional CFO will provide.
Small business owners may have a bookkeeper or basic accounting software to manage their daily operations, but that’s not enough for the complexity of growth management. Outsourced CFOs will help the organization scale itself as it grows.
Some ways outsourced CFOs help businesses manage growth include:
- Investigating revenue losses and developing possible solutions
- Hiring new workers and expanding the staff with individuals who have substantial knowledge, experience, and skills
- Implementing technology systems and processes to support sustainable growth
Early-stage startups also benefit from full-time or part-time CFO services because they help lay the financial foundation necessary for the company to achieve success. However, these new businesses can continue to use the services, even on a part-time basis, to manage their growth and expansion.
As the startup develops its brand and client base, it will experience new challenges that require a fresh approach. Instead of relying on outdated processes, the startup can continue working with its fractional CFO, who will provide financial analysis, insights, forecasts, and strategic plans to help them develop realistic business models with achievable growth objectives.
Create Forward-Facing Financial Visibility
One of the primary purposes of a fractional CFO is to make projections for the future by creating specific financial plans to help elevate itself. While bookkeepers and accountants focus on organizing and documenting current and past financial reports, an outsourced CFO will generate a financial forecast to help the company sustainably achieve steady growth.
Financial forecasts can be for the next 90 days, the rest of the year, or three to five years. The reports provide the company with a clear idea of its growth trajectory, capital requirements, and current cash standing.
Helping Achieve Goals
Business mergers, sales, acquisitions, and fundraising can be a challenge for some companies. However, seasoned fractional CFOs have ample experience raising millions of dollars in capital and equity funding for various organizations. They also have experience managing mergers and acquisitions.
If your company has a financial goal, Sanjay Gupta & Associates can help you achieve them. We can assist with everything from analyzing contracts to assisting with relationship building with vendors and prospective investors.
Who Needs a Fractional CFO?
Fractional CFO Services for Startups
Startups generally don’t have a lot of money to put toward seemingly unnecessary expenses like accounting. However, the salary of an in-house CFO for a startup can be around $130,000 annually, not including bonuses.
It’s more affordable and sometimes more beneficial for a startup to hire a fractional CFO to work on a specific project basis, such as bringing a new CEO on board or providing the business owner with financial reports relating to fundraising activities.
Companies Looking to Overcome Specific Problems
Fractional CFOs also work with established businesses without chief financial officers on staff or with accounting teams incapable of addressing specific problems, such as:
- Cash Flow Issues
- Navigating an Audit
- Low Gross Margins
- High Expenses
- Outgrown Existing Systems
It’s also possible for an experienced CFO to work as an advisor to an organization’s existing CFO. At Sanjay Gupta & Associates, we will assist high-level staff members who need assistance leading various projects like fundraising or navigating an IRS audit.
Book a Free Consultation with a Fractional CFO Consultant Today
As a leading accounting firm in Plantation, FL, our accounting professionals will gladly perform the functions of a full-time chief financial officer for your company. If you need a highly experienced fractional CFO to elevate your small business or startup, turn to Sanjay Gupta & Associates. Call 954-727-3777 today to schedule a consultation.