A CFO or Chief Financial Officer is a key member of the C-suite of any company who manages a whole host of key duties ranging from creating strategies to financial planning and improving the quality of services. If you are looking to avail of CFO services, you must know the different types of CFO services. Let’s take a look at the various types of CFO services you have at your disposal.
1. Fractional CFO services
As the name implies, a fractional CFO offers financial expertise to a startup company on a contractual basis. unlike a full-time CFO, a fractional or part-time CFO might be associated with multiple firms in tandem.
By managing a wide array of functions, a fractional CFO helps streamline finance which is quite complex for the founder or CEO to manage with just an accountant. In other words, a part-time CFO helps steer clear of the haze through a cluster of numbers.
Strategy optimization, capital-raising, and implementing systems are a few more responsibilities managed by a fractional CFO. Internal audits also become necessary as your business grows. Audits give you a microscopic view of the company’s financial health and cash flow. A fractional CFO minutely analyzes plenty of other facets such as taxation, procurement, and purchasing to name a few.
Hiring a fractional CFO benefits your enterprise in many ways. A part-time CFO is like a CFO on-demand hiring who helps cut down costs and you can still have a C-suite professional on your company’s payroll.
As a seasoned boardroom professional, a fractional CFO brings a diversity of experience to the table which also results in added flexibility.
2. Virtual CFO services
A large number of startups have come into existence in recent years and countless are making their inception while you are reading this. The majority of services offered by a virtual CFO are the same as a full-time CFO. A virtual CFO manages all the key responsibilities remotely and that’s the key difference between a VCFO and a full-time CFO.
Hiring a virtual CFO is the best bet for startups on a budget. By doing so, you can foster a well-structured accounting system needed for the success of your company. Also, a part-time CFO empowers your company by effectively directing your employees toward the major goals of the company.
3. Interim CFO
An interim CFO has vast knowledge and experience in the field of finance. As the name implies, an interim CFO offers a comprehensive assessment of the financial status of the company by joining the company on a temporary basis. You can hire an interim CFO in the absence of your company’s CFO. This could be due to your CFO quitting the organization all of a sudden or due to extended leaves.
An interim CFO can be hired on a full-time or part-time basis. Part-time CFOs are also called fractional CFOs. Hiring a permanent CFO could be expensive for startups and hiring a fractional CFO turns out to be an economical option.
There are several benefits of hiring an interim CFO. Proper fund-raising, quick decision-making, productivity, and a contingency plan during a crisis are some of the advantages of hiring an interim CFO.
4. Outsourced CFO services
An outsourced CFO is roped in on a contractual basis and they will formulate finance-related strategies after a thorough analysis of the company’s costs and profits.
Hiring an outsourced CFO is a more cost-effective option than hiring a full-time CFO. Another major advantage of onboarding an outsourced CFO is new perspectives. Your company can enjoy more flexibility in terms of engagement. Since an outsourced CFO is experienced enough to handle all sorts of minor and major financial problems, you can expect robust strategies that work in your company’s favor.
The Final Word
Hiring the right CFO largely depends on the needs of your company. Besides, the CFO you hire must have experience in handling the finances and compliance of your company’s stage. If you have any questions about outsourced CFO services, feel free to connect with FinAccountants.