Why Your Team Needs a Budget and a Fractional CFO

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Budgeting isn’t about cutting costs - it’s about fueling your growth. Here’s how a Fractional CFO helps founders grow smarter 👇

When working on a budget, the best way is for the fractional CFO to have calls with the team leaders. This saves founders plenty of time and avoids the inefficiency of going back and forth.Here are some common questions a fractional CFO will ask the team leaders that will help a business to grow smarter:

👫 𝗛𝗶𝗿𝗶𝗻𝗴 & 𝗚𝗿𝗼𝘄𝗵 𝗘𝘅𝗽𝗲𝗰𝘁𝗮𝘁𝗶𝗼𝗻𝘀• What are the positions they are hiring at the moment (if there are any), and is there any urgent hiring a team leader needs to do in the next 12 months? What are their salary expectations? The last step is to see when they would like to do the hiring. Sometimes, it's difficult to know the exact month; this is why, in this case, it's good to understand the maximum number of months the hiring can be delayed.• For an accurate budget, a fractional CFO must understand the correlation between hiring and the company's growth expectations. This is why it's important for team leaders to be aware of what the companies want to achieve in terms of the number of clients and the amount of revenue. The best way to sort this out is to ask team leaders how hiring could change if the business gets X, Y, or Z clients or revenue.

🤖 𝗔𝗜 𝗗𝗶𝘀𝗰𝘂𝘀𝘀𝗶𝗼𝗻• There is a new topic that now needs to be covered in budgeting talks, and this is AI. A fractional CFO needs to understand how a department is leveraging the use of AI. A good way to start this conversation is to ask team leaders how they think AI will impact their work. A good solution to encourage employees to leverage AI is to offer them a monthly budget, like £200 - £300, that they can then use to explore new AI tools.

🏧 𝗢𝘁𝗵𝗲𝗿 𝗰𝗼𝘀𝘁𝘀• Besides hiring, there are other costs a fractional CFO have to discuss with team leaders. There are plenty of one-off or recurring costs that need to be addressed. The best way to discuss these costs is for the fractional CFO to review the company's bookkeeping, export a report detailing all the costs the company is currently incurring for that specific department, and present it to the team leader. The goal here is to find out if there are any other costs that the business might incur in the future. There are always some costs that are not accounted for in the company's budget or something that the company is paying for but not using.

After a fractional CFO goes through such conversations with the team leaders, the founders will have better control of their company's finances, and this helps them grow smarter. Budget talks also create a lot of accountability in the business. Team leaders love these talks cause they have a better understanding of the company's plans. It's a win-win for everyone. No 12-month budget? Drop me a DM.