As businesses flourish and expand, success brings both excitement and its fair share of hurdles. Growing companies realize the importance of attracting top-notch talent to ensure continued prosperity. However, despite striving to provide attractive compensation packages, financial limitations can occasionally pose challenges, and unforeseen situations may lead to the departure of valuable team members. Such was the case for a local insurance firm, boasting an annual revenue of $3.5 million with a financial team of two. Rather, soon to be one as their CFO was resigning. Instead of pursuing the traditional route of hiring a full-time replacement, the company opted for a more cost-effective solution by engaging a fractional CFO at Aligned CPA.
A Unique Challenge
The insurance company had been operating successfully for over a decade, providing various insurance products to individuals and businesses. Their finance department consisted of a full-time bookkeeper and a Chief Financial Officer. The CFO also served as the CFO for another company under the same parent company’s umbrella. This position managed the financial planning, reporting, budgeting, and compliance for both entities.
Unfortunately, however, the resignation of the CFO left the insurance company searching for an experienced leader. The replacement would need to oversee their finances, make strategic decisions, and ensure financial stability. Furthermore, they knew that it would be a requirement that the new CFO perform their duties for both companies. The President of the insurance company was concerned that the company’s budget could not absorb the additional cost of a full-time CFO without impacting profitability.
Thinking Outside of the Box
In light of these challenges, the company embarked on a search for alternative solutions and encountered the concept of fractional CFO services through Aligned CPA. Fractional CFOs are experienced financial experts who work with multiple clients on a part-time or project basis. This approach allowed the insurance company to tap into the expertise of a seasoned CFO without the financial commitment of a full-time hire. It also provided an option for the sister company. It was important that the fractional CFO would be able to provide several deliverables, so each company made a list of the responsibilities and timeframes that would have to be met.
Better than Expected Outcome
The decision to hire a fractional CFO for both the insurance company and the sister company has yielded several benefits.
Each entity has a separate scope of work that is performed by the fractional CFO on a monthly basis, and the monthly fee is customized based on that scope of work. By opting for a fractional CFO, the companies have a combined savings of over fifty thousand dollars annually. This is in comparison of the expense of each entity hiring a full-time financial expert that they didn’t actually need on a full-time basis. Furthermore, the insurance company has the flexibility to adjust the fractional CFO’s workload based on their evolving financial needs.
Additionally, the fractional CFO at Aligned CPA values the relationships formed with her clients. She feels as though she is a part of their team, albeit remotely and part-time. The bookkeeper and president of the insurance company know that they can rely on her financial expertise. She serves as a resource for the various challenges they face throughout the month, in addition to her timely execution of their required deliverables.
Hiring a fractional CFO proved to be a strategic and cost-effective solution for the insurance company and sister company. This decision allowed them to maintain financial stability, access specialized expertise, and realize substantial cost savings.
Final Thoughts
Fractional CFO services provide targeted financial expertise, which may include long-term financial strategy and advice on specific projects or areas, offering flexibility and cost-effectiveness.
Your Success Becomes Our Priority
Through the Fractional CFO services at Aligned CPA, we help you grow your business as your strategic partner.
Making empowered business decisions on accurate financial data can start today.
Cessie Cothran, MBA
Combining the CFO Advisory with tax strategy creates the best opportunity for financial success. We like to call it being perfectly Aligned. Our clients know they have us as a partner, helping them to feel secure about their financial future.