Since the 1960s, the concept of fractional or part-time usage of a valuable resource has been around. When a French ski resort owner realised that few people could afford, let alone wanted, a resort condominium for all 52 weeks of the year, the vacation real estate industry pioneered it. He tackled the problem by splitting each room into 52 different time units. check it out
He launched a worldwide marketing phenomenon known as the time-share industry with the slogan “stop renting a room, buy the hotel.” Each unit was sold to a different owner, who paid a reasonable price for the full use and enjoyment of the week that best fit their schedule. If a buyer required more than one week per year, they could purchase as many as they desired. Over 4 million American families now own at least one vacation timeshare, despite the addition of other “bells and whistles” over the years.
The definition of a fractional CFO is the same. The majority of business leaders understand the importance of having qualified and seasoned financial professionals on their management team. Many businesses do not need a full-time CFO. As a result, they are unable to justify the expense of a full-time wage. Even if an owner or manager lacks the requisite skills, a competent CFO can more likely deliver a superior product in less time. As a result, the most precious and scarce resource of all, TIME, becomes accessible!
No successful entrepreneur ever started a company with the intention of spending the whole day reviewing balance sheets, calculating marginal profit contribution, dealing with bankers and tax accountants, or responding to regulatory inquiries. They start companies to gain a competitive edge in their chosen field by meeting the needs of their customers. Any time spent “on the books” takes them away from their true mission and is a costly diversion from their value proposition.
Keeping a fractional or part-time CFO on staff is a cost-effective option that can be tailored to a company’s specific needs, budget, and life cycle. The key to a good fractional CFO partnership is to plan and staff it with a specialist who can understand your company and meet your financial needs. They must also become an important member of the management team (even if just part-time). Your fractional CFO should meet with you to create a cost-effective programme to meet your particular business requirements. You’ll set up a daily schedule of dedicated time to meet those needs together. The schedule can range from a few hours per month to several days a week, and it can be updated as needed in the future. You, the customer, can normally terminate your fractional CFO at any time and for any reason, just as you would if you hired a full-time employee, without incurring additional costs.
Most Often Asked Questions
•What does a CFO do exactly, and how does it vary if I use a fractional CFO?
The chief financial officer, also known as the CFO, is the person in charge of an organization’s overall financial operations. This position is in charge of budgeting, cash flow management, record keeping, and financial statements, among other items. The essence of their relationship to the company is the only distinction between a conventional CFO and a fractional CFO. A fractional CFO is a part-time, independent contractor, while a full-time CFO is a full-time officer and employee. Their roles and duties, however, are almost identical.