This video and article are a part a six-part series: “One Question with…Rehmann Advisors on Discovering Your Organization’s Great Advantage.” This series features a select group of Rehmann advisors who unpack six questions on timely issues, as well as reveal practical advice for today’s ever-evolving economic and business landscape. Learn more about this series and Rehmann’s solution offerings here.
Across the United States, small- to mid-sized organizations make up 99% percent of the market. These organizations range from 1,000 employees to zero full-time staff. With a mission and vision to expand, these organizations must consider sustainable and scalable growth, including a strategy that benefits the bottom line.
This is where hiring a fractional CFO becomes your greatest advantage.
We sat down with Tom Shemanski, leader of Rehmann’s manufacturing industry group and CFO services team, and asked him one question that organizations need to think about in today’s ever-evolving market: What does it look like for an organization to have a fractional CFO, and why should it be a top-of-mind consideration for leadership?
In response to this question, we broke down his answer into three insightful topics:
- Right fit for a fractional CFO
- Qualifiers for hiring a fractional CFO
- Top advantages for organizations
Right fit for a fractional CFO
Strategy, financial accountability, and leadership are needed across all company sizes and industries. Companies must ask themselves if they have that executive financial presence driving these areas effectively.
- Do you have the right people in place to develop a strategy?
- Are they accountable?
- Do they help align the management team and ownership?
If you answered no to any of these questions, you have potentially recognized a gap in your financial leadership that can be addressed by a fractional CFO.
The management of your tools and systems is another item that needs to be considered when deciding if you are a right fit for a fractional CFO. Tools are essential for building processes, monitoring, planning, and execution. If they are not updated, lack functionality, or are not being utilized to their fullest potential, you could be losing revenue or deterring growth for your organization. The more dynamic or challenging your business environment, the bigger ROI an experienced fractional CFO can deliver.
Situational considerations also should be addressed. These may vary and could include succession planning, layoffs, turnover, and even recessionary market conditions. If your organization is planning for any of these situations, a fractional CFO can step in to navigate circumstances, build a plan, or fill in for these personnel gaps.
Qualifiers for hiring a fractional CFO
Two areas are important when considering a fractional CFO service for your organization. First, your fractional CFO partner should have the right skillset. At a minimum, your fractional CFO candidate should have broad-based experience in financial reporting, strategic planning, financial modeling, cash management, key company negotiations, and project-management. Every organization will need a combination of these skillsets as your organization goes through change and as new projects are identified. These broad-based skillsets will create a long-term relationship, while making the most profitable impact.
The second is partnering with a fractional CFO who fits within your organization’s culture. Every organization has a different culture and a different way of working together as a team to get things done. A fractional CFO is a key position, and that person should fit in not only within the accounting department, but also within the c-suite and management teams. Aligning a cultural fit maximizes the benefit of having a fractional CFO within your organization.
Top advantages for organizations
If you’re not moving forward, you’re moving backward. Many organizations get stuck in a rut, where it is easier to commit to continuing with current operations. The perception is that it isn’t a risk, it isn’t as costly, and things are fine … for now. But over time, these decisions can have the opposite effect.
Leveraging someone from the outside, an objective person who can come in and give your organization real and honest feedback, provides a tremendous benefit. We strategically developed Rehmann’s fractional CFO service to help drive value, focus, and opportunity so you can focus on what matters most. We work as an extension of your team to improve your organization’s financial strategy and processes, as well as to ensure a plan is in place to move forward.
If you want to scale your organization, expand into new markets, ensure sustainability in an ever-evolving market, hiring a fractional CFO is the first step toward embracing your organization’s Greatest Advantage.
