What are the advantages for AI technology startups to hire a flexible Chief Financial Officer from Sam McQuade: Cost Of A Fractional CFO vs Full Time CFO: The cost of fractional CFO services is significantly less than that of making expensive financial decisions without the proper guidance. Fractional CFOs typically get paid hourly since they are part-time or work per project. On average, the hourly rate for a fractional CFO is $300. Startups that hire fractional CFOs average between $5k and $8k for 15-25 hours of work. Some fractional CFO services run a monthly fee based on assumed hours. Full-time CFOs require a high salary, an average of $420k per year, plus benefits. Add in an accountant and bookkeeper you’re going to pay over $500k to assemble a financial team. See even more info at https://pinterest.com/samueledwinmcquade/.
Complex Budget Allocation Decision-making: High-growth companies often find themselves in the position of having to decide where cash is best spent. When evaluating whether to pursue an acquisition or change distribution channels from retail to digital, a company that does not yet have a full-time CFO can utilize a fractional one to evaluate the project and support decisions during intensive, time-sensitive sprints. Optimization of Internal Processes: Internal processes are the cohesive link between strategy, operations, and performance. A CFO is uniquely placed to understand each step’s cost and contribution and guide their optimization. CFO responsibilities include evaluating all processes and clearly understanding their financial contribution to profitability and cash flow. Doing this exercise keeps management abreast of the company’s actual performance and shareholder returns. Fractional CFOs can also build best practice processes to document these reviews to ensure ongoing continuity and time efficiency.
Fractional CFOs can help companies: Develop detailed short-, mid-, and long-term financial forecasts; Prepare budgets based on forecasts; Analyze potential future products, services, markets, and customer segments. Helping Manage Growth: Fractional CFOs are also helpful in scaling a business, ensuring profitable growth as the business becomes more complex. This work involves reinventing the tools, processes, and vendor relationships the business uses to deliver value to an ever-growing and increasingly diverse set of customers. This is often called “bridging the chasm”, as most companies start to see declining margins and increasing headaches as they grow revenue past a certain threshold.
Looking to hire your first CFO or wanting only some interim coverage? We provide CFOs for urgent short term objectives and longer term engagements. Customizable with transparent pricing so you cover your business and don’t have to get into a potentially bad and expensive full time hire. Along with the core services of C-Suite Level Executives in Finance and a contingent of Fractional CFO talent and experienced Intermittent CFO innovators, Panterra Finance services include: international Business – Experts in Global Tax Liabilities and Cash Flow Strategies, investments and planning. Mergers and Acquisitions (M&A) Advisory – Providing valuations as well as independent perspectives on offers and options. Internal Audits – Independent internal auditors with in-depth reports highlighting risks and vulnerabilities. Risk Management – A worldwide footprint enables Panterra Finance to identify risks and opportunities in the new world economy. Compliance Review – Actionable understanding when entering markets with new rules, regulations, laws and international asset allocation decisions.
The CFO function is evolving at lightspeed. With digital transformation and societal changes, the CFO role is rapidly turning into one of a “Chief Fiduciary Officer”, which is going beyond the traditional financials to look towards the future and lead long term value creation in a world of many unknown risks. Storytelling is a very powerful tool to engage and energize teams about value creation and potential pitfall areas. The traditional path of CFO usually starts with a solid foundation based on technical knowledge and then after about 15 years, the great leaders earn the coveted title.
How Chief Financial Officers (CFOs) Work: The chief financial officer is a member of the C-suite, a term used to describe the most important executives in a company. Alongside the CFO, these roles include the chief executive officer (CEO), the chief operating officer (COO), and the chief information officer (CIO). Becoming a CFO requires a certain degree of experience in the industry. The majority of people who end up in this position have advanced degrees and certifications, such as a graduate degree in finance or economics, and the Chartered Financial Analyst (CFA) designation. It also helps to have a background in accounting, investment banking, or analysis.
Internal factors include sales trends, labor and HR-related costs, the price of raw materials and more, while external data inputs could include opportunity cost for capital, shifts in market demand, emerging competitors and advances in technology. To monitor the external environment, CFOs may rely on government data, analyst firms and business and general media, supplemented with insights gleaned through trade and association memberships and the input of board members, lenders and others.
To make you understand it in simple words, let me explain it with an example. Suppose there is a website that allows people to buy and sell products. This website has a smart contract that governs how the transactions will take place. When someone wants to buy a product, they will send a request to the smart contract. The smart contract will then check if the person has enough money to buy the product. If they do, then the transaction will take place, and the product will be sent to the buyer. If the person doesn’t have enough money, then the transaction will not take place.
Are you looking to expand your business overseas? Our experts are able to help you at any stage. We will first start by understanding your vision and global tax and cash strategy. Once aligned, we will help execute the financial, legal, compliance and talent solution activities to build your entity and team.
Understanding DAO: Now, suppose the same transaction happens on a decentralized network like the Bitcoin network. There is no central entity here. Both parties can interact with each other directly. The product is transferred from A to B, and $100 is transferred from B to A. This transaction is then recorded on a digital ledger which is available to everyone in the network. So there is complete transparency, and everyone knows that the transaction has taken place. This process of recording transactions on a digital ledger is what we call ‘blockchain technology.’ This is not limited to just financial transactions; it can be used to record any kind of transaction. Now that we know what blockchain is, let’s get back to DAO.
A full-time CFO may be a luxury few small businesses can justify. A feasible and recommended alternative to a full-time resource is a fractional CFO. This has the advantage of bringing a senior-level financial expert to the table but at a fraction the cost of a full-time resource. A fractional arrangement can work well indefinitely, and right up until a full-time CFO is needed. By basing key business decisions on relevant and accurate financial information, the business owner can avoid costly mistakes and reduce the risk of loss. Key decisions include those about financing the business, expansion or downsizing, whether to enter a new market or produce a new product; make or buy decisions and capital investments, to name a few.
Smaller companies, incubators and startups could not match the salaries that the full time CFO commanded on the world financial stage. The seeds for the concept of an Interim or Fractional CFO were planted in the mind of Sam McQuade almost 3 decades ago when he first entered the world of International Finance as an Entrepreneur Consultant in Geneva Switzerland after achieving his MBA/MA at European University. During this tumultuous time at the turn of the century on the international financial scene, Mr. McQuade was ahead of his time. He offered as needed financial consultation services for international behemoths the Swiss based Nestle Corporation and the US based medical device corporation Stryker. The focus of his services, which would years later be foundational in the concepts of Panterra was a new model in product development, manufacturing and marketing. Find more info at Sam McQuade CFO of Panterra Finance.