First time CEOs, or founders that haven’t been in an organization with a strong finance team, are often unsure of the benefits provided by a CFO or when they need that help. A strong fractional CFO helps the CEO well beyond the administrative side of the business. 

Strategic Planning

CFOs consistently look forward, searching for early indicators that the business is on or off track well before the results happen. The CFO should build a metrics-based forecast driven by internal KPIs resulting in your financial statement forecast. Once that forecast is in place, the CFO helps the CEO measure against the plan and correct when goals are unmet. Finally, they should tie those metrics into your capital planning to ensure everyone knows the runway required for the next financing event.

Risk Identification and Mitigation

Beyond the strategy, the CFO evaluates the business for risk and creates plans to mitigate it before it happens. Whether that risk is financial, or the CFO is partnering with your counsel on legal risk or accountants on tax risk, the CFO engages experts to ensure a plan to avoid these issues. Having a CFO on staff to share the burden of risk evaluation and then determining what to address eases the workload on the CEO. A great CFO explains the risk to the CEO and investors and advises on when to address that risk.

Investor and Board Support

The CFO has a fiduciary duty to the investors and shareholders as part of their duties. The CFO helps the CEO prepare board and investor presentations beyond ensuring accurate metrics and financials. They will help the CEO with investor communications to ensure a continuous flow of information from the company to those key stakeholders.

Finance Team Development

Lastly, the CFO helps evaluate the existing finance team and guides future hiring. The CFO ensures the right staff is on board for the current version of the business and that the staff can scale as the business evolves. Eventually, the fractional CFO will help evaluate full-time CFO candidates and ensure a smooth transition.

Tasks to Avoid

Missing from the responsibilities above for a fractional CFO is the transactional aspect of the business. The CFO sets the policies and ensures the activities are rigorously completed but should not be actively running payroll, accounts receivable, or accounts payable. Startup CFOs can do all those activities, but the companies’ resources are better spent on having more efficient resources to process those activities.

In conclusion, the role of a fractional CFO extends far beyond traditional financial management. At Bagchi Group, we understand a CFO’s pivotal role in guiding your company toward success. From strategic planning and risk mitigation to investor and board support, our experienced team becomes invaluable partners for CEOs navigating complex business landscapes. If you’re a first-time CEO or a founder seeking to optimize your financial strategies, we invite you to harness the expertise of Bagchi Group’s fractional CFO services. Let us help you unlock your company’s true potential while you focus on propelling your vision forward. Contact us today to explore how our CFO services can transform your business journey.