Your business already has a Controller who is doing a great job. Invoices are always accurate, bills are paid timely, the bank balance is always reconciled, and financial statements are prepared accurately every month. So why would you need a CFO? Because a CFO is focused on the future while a Controller is focused on the past.
A good CFO does things like:
- Establishing long term business goals and plans (3-5 years)
- Detailed analysis of the P&L to drive higher growth and profitability
- Building annual operating budgets that support business goals
- Planning for future financial needs of the business (ex. Working capital to support growth or funds to buy new equipment)
- Key Performance Indicator development and reporting
- Understanding real product costs and making sure product pricing is accurate
- Forecasting cash flow needs
- Deciding when to add a new facility or new employees
These decisions can have dramatic financial impact on the business and these decisions continue to generate significant value for years to come. In my 30 years of experience, it is very rare to find a Controller who has the skill set to do what a CFO does or a CFO who is happy doing the things a Controller does. But a full time CFO is a luxury that most growing businesses simply can’t afford. That’s when a Fractional CFO really makes sense.
A good Fractional CFO is a complement to your business Controller and more importantly, a good Fractional CFO can add tremendous value and help you take your business to the next level.