Many construction company leaders, real estate managers and general contractors struggle with accounting functions. They are good at what they do – build, repair, maintain things – but dealing with the numbers is challenging. The truth is all construction industry companies need someone dedicated to overseeing accounting, budgeting and auditing functions. Mega corporations have a Chief Financial Officer (CFO) in the C-Suite who handles those things for them. For small to mid-size companies and independent contractors working with fluctuating, often limited budgets, hiring a part-time CFO is one solution. Hiring a Fractional CFO is another option.
What duties does a CFO perform?
Both types of accounting partners assume the role of overseeing the accounting department and work with other company leaders to monitor any activity that impacts financial health. They also:
- Study economic trends and evaluate future projects’ potential impact on growth
- Analyze operations workflow, identifying opportunities to streamline processes and improve production while lowering operating costs
- Compare actual costs and revenue to budgets, making adjustments or recommendations to improve forecasting
- Direct accurate preparation of all financial reports, including the balance sheet, federal and state tax returns, compliance reports, income statements, cash flow statements and P&L statements.
- Other duties as required to meet the needs of the company, third-party vendors and other stakeholders
What is the difference between a part-time CFO on salary and an independent fractional CFO?
The main difference between an in-house team member and an outsourced CFO is the structure of the relationships. A part-time staff member is an employee, one that is paid to perform the tasks either on a salary or hourly basis. Alternatively, a fractional CFO becomes a member of the company management team as an independent partner, pay is structured based on both direct and indirect involvement as needed. Also, this remote accounting expert may be enlisted to help during peak seasons, to address a temporary staffing shortage or help a construction company prepare for market volatility.
Hiring an on-demand CFO compared to onboarding a part-time CFO
Another major difference between bringing an on-demand CFO and hiring a part-time controller to your roster is the cost and time investment for finding a well-qualified employee with construction industry experience.
For instance, to onboard a paid employee, a firm must first advertise the opening, screen applicants, conduct interviews (and, callback interviews), and complete reference and background checks. Then, the employee must be trained, which takes more time and money. If a company is hiring a seasonal or part-time CFO, this process must be repeated every time the workflow or the market changes to ensure the company is ready to respond. Even worse, part-time employees may leave unexpectedly due to health issues or simply find a full-time job.
On the other hand, partnering with a professional outsourced partner, like Daaxit, means your CFO is there when you need them, fully prepared to step in during volatile times, increasing or decreasing activity on-demand. No additional training. No additional expenses. No stress.
Another key benefit is that your team has someone who understands the nuances of the construction business and brings keen insights based on decades of experience to the table to help you reposition for sustainability and growth.
Is hiring a fractional CFO right for your small to mid-size business?
Whether you recently lost your CFO or never had one, a fractional CFO can help you build a better construction business and improve the company’s financial health. To learn more, contact Daaxit today and request a free consultation.