$250,000.
That’s the going rate for a full-time, in-house chief financial officer in the Los Angeles market these days. That’s a significant investment in a financial leader, but it’s not the only problem that businesses looking for such professionals have to manage. Arguably, a hurdle even bigger than cost is old data. Many CFOs and outsourced professionals create monthly reports that display outdated data, which may no longer be relevant.
Rather than producing monthly reports, at Weekly Accounting, our fractional CFOs specialize in presenting our partners with weekly reports to ensure that data and financials are more up-to-date and real-time. This 52-feedback loop helps enable more proactive decision-making, catches small problems before they become large ones, and enhances financial transparency and accountability.
What a Fractional CFO Actually Does for Los Angeles Companies
So what does a fractional CFO do? Good fractional CFOs offer high-level strategic financial guidance, including financial forecasting, budgeting, fundraising, cash flow management and strategic financial planning that upgrades your financial infrastructure, but without the cost of a full-time, in-house professional.
Now, consider some of the challenges that are specific to the Los Angeles market. There’s a high customer acquisition cost (CAC), talent is expensive and efficient, and unit economics are a necessity and not just a “nice to have.” That’s why Weekly Accounting’s weekly reporting cadence is so beneficial compared to just monthly P&Ls. It helps business leaders gain a more real-time overview of their key financial metrics, enabling them to make faster and more informed decisions.
Beyond Monthly Reports: The Weekly Difference
At Weekly Accounting, we report out 52 times a year compared to the conventional 12 times per year. Doing so has several advantages, including the ability to present financial data and track KPIs in near real-time, enabling leadership to make faster, more informed decisions. Weekly reporting also enables businesses to better manage their cash flow. Think of it like this: Weekly reporting allows you to catch and correct problems much faster. Rather than waiting until month two to observe data and make adjustments, you can catch the issues in week two. Weekly visibility supports high level financial strategy compared to bookkeeping alone.
Unit Economics Your Controller Doesn’t Track
Beyond more timely financial data, fractional CFOs also track unit economics that a controller isn’t responsible for — and efficient economics are critical to success in the Los Angeles business economy. Some of the metrics that a fractional CFO will track include:
- LTGP: Lifetime gross profit shows total profit from a customer over their entire relationship with your business.
- CAC payback: CAC payback indicates the number of months it takes a company to recoup the costs incurred in acquiring a new customer.
- Contribution margin by channel: This indicates the proportion of each sales channel’s revenue that covers fixed costs and generates profit.
When Los Angeles Businesses Need a Fractional CFO
So, at what point should you be hiring a fractional CFO at your Los Angeles business? Typically, it’s best to hire one when your business is growing, but you may not be able to afford or don’t want to hire a full-time CFO. They can also be helpful if your business needs to stabilize its financials and uncover more growth opportunities.
Consider these scenarios:
- When you hit $1 million to $15 million in revenue.
- If you need to prepare for fundraising rounds.
- If your business’s leadership is devoting extensive time to financial management when they could be better served elsewhere.
- If your business is experiencing cash flow issues.
The Hidden Cost of Waiting
Reactive financial management is not winning financial management. Reactive management can leave businesses vulnerable to crisis, result in missed opportunities, and damage their business reputation, underscoring the importance of acting quickly to seek financial help when needed. While there’s a cost to hiring a fractional CFO, there’s potentially a much higher cost that comes with waiting too long to get help from experienced financial leadership.
What’s Included in Weekly Accounting’s Los Angeles CFO Services
As part of our weekly reporting, you’ll receive more than just Monday Morning Metrics and insights that allow you to optimize your business performance, but real-time system integration and the ability to create a custom dashboard to make it easier to track everything. It’s all part of the value-added service you’ll receive when you work with Weekly Accounting.
Monday Morning Metrics
Start every week off with a fresh set of data to gain clear insight into some of the most important KPIs for your business. As part of our weekly financial reporting offering, we provide Monday Morning Metrics to our partners, which detail key data points such as CAC, revenue and collections information, unit economics tracking and cash flow forecasting. Weekly metrics give our partners a near real-time overview of key data points to see financial performance and business growth.
Cash Flow Forecasting That Works
When you work with Weekly Accounting, you can count on receiving the financial information that matters most to your business. We’ll provide you with 13-week rolling forecasts, an overview of your cash positioning on a daily basis and we’ll coordinate scenario modeling to help you plan for the future. We’ve found that our partners receive much more value from these financial reporting tools than they do from GAAP cash flow statements.
Fractional CFO Costs in Los Angeles
A full-time, in-house CFO can add several hundred thousand dollars worth of overhead to your business, something that many startups and small to medium-sized businesses cannot afford. However, beyond salary, businesses must account for additional benefits that can further increase compensation. Considering that financial leadership turnover averages about 25 percent per year and there’s often a lengthy, and expensive, recruiting period involved in searching for open positions, your business might not just be investing significant capital into a full-time CFO, but could also be missing out on financial reporting, growth opportunities and strategic planning during any search process as well.
Fractional CFOs offer a more affordable and flexible alternative to the full-time CFO position. With various service plans available, your business can select the one that best suits it for its current state and scale up or down from there. Just think of Weekly Accounting’s Los Angeles fractional CFO services as expert financial guidance without the full-time cost.
Industries We Serve Across Los Angeles
We serve not only all types of businesses throughout the Los Angeles area, but also a wide range of industries. From DTC brands to marketing agencies, e-commerce and SaaS companies, we’ll ensure that a fractional CFO with direct industry experience and strategic financial leadership is paired with your business to add more value to the partnership.
Here’s how we add value to different types of businesses:
- DTC brands: We specialize in assessing customer acquisition economics, inventory and profitability.
- Marketing agencies: We’ll determine project-based revenue, utilization and client profitability.
- E-commerce: We’re experts in multi-channel attribution, fulfillment costs and determining seasonal cash flow.
- SaaS: We’ll crunch MRR and ARR data, churn cohorts and perform runway modeling.
The 4-Week Implementation
It can often take up to 6 months for a full-time CFO to become fully ingrained with your business when starting a new position. We specialize in an accelerated onboarding and implementation process of just four weeks, so our fractional CFOs can begin optimizing your financial operations faster. Our timeline is also significantly faster than the vague integration period estimates provided by other financial services firms. Here’s an overview of our four-week implementation period:
- Week 1: We start by gaining access to your systems, integrating data and setting up your chart of accounts.
- Week 2: We’ll work to integrate systems and clean up your balance sheet.
- Week 3: We’ll set up your financial dashboards, arrange a custom reporting configuration and set unit economics baselines.
- Week 4: In addition to collaborating with your team, this is when you can expect your first Monday Morning Metrics report.
Our accelerated timeline is purposefully designed to enable us to provide financial leadership more quickly for your business.
FAQs
What is the cost of a fractional CFO in Los Angeles?
The cost of a fractional CFO isn’t as much based on geography as it is on the level of service you need. At Weekly Accounting, we have several fractional CFO service plans that you can choose from, specifically based on your firm’s needs.
What’s the difference between a fractional CFO and an outsourced controller?
Fractional CFOs tend to focus on high-level strategic growth, financial forecasting and financial planning. Outsourced controllers, conversely, handle more of the day-to-day financial responsibilities. Fractional CFOs are more forward-thinking, big-picture strategists, while controllers are more focused on a business’s current financial situation and existing finance team.
How is Weekly Accounting different from traditional LA accounting firms?
Weekly Accounting’s services are very tech-focused. We automate data collection and reporting, and provide our partners with weekly insights rather than just monthly reports. This enables our professionals to provide more strategic guidance and inspire leadership to act more quickly when a problem needs to be addressed. Additionally, Weekly Accounting partners with businesses at all stages — from startups to established enterprises. We also pride ourselves on a streamlined, four-week onboarding process that enables us to get integrated more quickly, allowing us to begin providing value to your business.
Can a fractional CFO help prepare my company for fundraising?
Absolutely. Fractional CFOs are experts in financial modeling, which is crucial for creating investor-ready materials and ensuring that your firm’s financial status can tell a credible and engaging story to gain investor trust. From financial modeling and projections to strategic storytelling to supporting the due diligence process, fractional CFOs often play a significant role in fundraising and helping a company’s financial health.
Why do you focus on weekly reporting when everyone else does monthly?
Weekly reporting helps enable faster decision-making and creates better alignment in businesses, especially those that are scaling. Weekly reports also provide a clearer view of progress, helping leadership identify their priorities and pinpoint issues that need to be addressed before they escalate into major problems. Monthly reports tend to offer bigger picture insights, while weekly reports can better help teams stay on track.
What size Los Angeles companies benefit most from fractional CFO services?
Though we work with all types and sizes of businesses at Weekly Accounting, our ideal partner is the small to medium-sized business. These types of businesses can significantly benefit from high-level financial leadership, but may not have the budget to hire a full-time, in-house executive. Outside of small to medium-sized businesses, startups and growth-stage companies can also greatly benefit from fractional CFO services.
Contact Weekly Accounting Today
Are you ready to optimize your financial reporting to ensure you’re more proactive and able to make informed decisions faster? Contact Weekly Accounting today for more information and to schedule a consultation. Our weekly reporting abilities enable business leaders to make faster decisions, take advantage of growth opportunities, plan more strategically and optimize cash flow. Contact us today to learn more and see what your first Monday Morning Metrics will look like.