Recession Concerns? A Fractional CFO May Be the Answer

An economy riddled with unknowns and concerns about a possible recession has business owners looking for ways to cut costs and spend more efficiently. To optimally pilot your company through these challenges, you must first know exactly where you stand financially.

To run your business with a forward-looking perspective, there is no substitute for the experience, insight, and expertise of a CFO. Yet not all companies need one full-time – and that’s where a fractional CFO makes sense.

As the word implies, fractional simply means that services are rendered on an as-needed basis and are keenly focused on specific issues and outcomes. It enables companies to bring in-depth financial knowledge, services, and technical expertise to their organization on an outsourced, part-time, retainer or contract basis, without the in-house salary, benefits, and other costs associated with a full-time CFO.

What do you need in this economic climate and how can a fractional CFO help?

To sustain your company through challenging times – and to grow – you must know your numbers. A typical accounting staff is generally focused on historical, financial data which means your business must react to its current environment and circumstances rather than operate with a proactive approach. Once you have accurate data, you need the Financial Intelligence of a CFO to understand and interpret your financials to inform your business decisions. This is always important, but during challenging times failure to make data-based decisions can have more immediate and dire consequences.

As a fractional CFO I work with business owners to get them where they need to be. We first identify the financial statements you should be looking at, and ensure they are timely and accurate. These include not only the Income Statement, but also a detailed Balance Sheet, and most critical – a Statement of Cash Flow. Tracking and assessing the right data will enable you to fully understand your profit and cash flow and reveal where you need to start to improve cash flow management and profitability.

No matter the economic climate, a fractional CFO can help you keep your finger on the pulse of important elements of your business, including the following:

  • Cash could be deficient even if your business has been growing. By learning to calculate your Cash Conversion Cycle you can monitor changes as you implement strategies to improve cash flow and profit.
  • Working Capital is the financial resource that enables funding of your operations. Accurately calculating your required working capital will provide the basis for deciding whether to temper your activities to the limits of your existing working capital or whether, and how much, you need to borrow to fund growth.
  • Growth can be stalled in the face of increasing demands and the lack of a solid financial strategy. Together we will look at your financial and operational infrastructure and develop the strategy and solutions that will enable you to not only keep operating, but to break through that growth wall that you may have come up against as a result of the economic volatilities of the last few years.
  • A financial dashboard will be created to help you monitor the pulse of your business, knowing what to look for and how to recognize when adjustments are needed.

What should you look for in a Fractional CFO?

  • Someone who has substantial experience working with your size company.
  • A clearly defined process for getting your financials on track.
  • A high-level understanding of business systems and their implementation, such as EOS.
  • A good fit with your company culture, which will provide a basis for a more holistic understanding and approach to your business needs.

As a fractional CFO I can help you fine tune your finances for maximum cost savings and efficiency, while spending far less on financial expertise than if you hire a full-time CFO. My work is founded on 35 years of experience in senior financial positions, including building and running my own $20 million company and working with many privately held, small to mid-size businesses.

As a CFO with a CEO perspective, I understand what business owners face every day and how all aspects of your business are connected. I’d welcome the opportunity to help you establish a financial structure that encompasses the knowledge, data, and tools that will meet the unique needs of your business and keep you moving forward with confidence, through both good times and those that are challenging. Contact me for a complimentary discussion of your specific situation.

Written by

Rick Arthur is a CFO whose expertise is built on Financial Intelligence and 35 years in senior financial roles. Coupled with a CEO’s perspective and the experience of building his own $20 million company, he brings a unique depth of insight into business from the top down. Wired to get to know people, Rick works hand-in-hand with business owners of intentional, growth-oriented companies, solidifying relationships as a trusted advisor and confidant to his clients. He leverages his experience to help business owners gain traction and stay laser-focused on the company’s vision, cash flow, and profitability – all while creating big picture solutions for strategic planning, growth and sustainable success.