Why Are Israeli Business Choosing Fractional CFO Service?

Startups and Small Businesses in Israel can often face financial challenges during the early stages of their growth. There are high operational costs to getting started, hiring talent can be competitive, and initial funding may not yet be secured.  

Since there are not enough financial resources or practical needs for a full time CFO to be hired, it can be helpful to have the support of a Fractional CFO (also known as Outsourced CFO) to provide financial leadership and accounting expertise to guide the early decisions of the company. 

A Fractional CFO is an experienced Chief Financial Officer who works part-time for a company on a contract or consulting basis as an outside advisor, rather than as a full time employee. They provide the high level vision, expertise, and financial strategy and can oversee the operations of the new business. Considered senior in level, they work beside the C-Suite and Founding Partners of a company to guide important business decisions. They usually work remotely or physically apart from the employees of the company, or can sometimes join on premises for a limited basis.

Their work can include building a solid business plan, identifying what kind of funding or investment makes sense, budget planning, creating a detailed forecast for potential investors, cashflow management, credible reporting, and overall financial planning. Fractional CFOs are highly experienced and knowledgeable. Some companies also hire a Fractional CFO if their existing CFO goes on a maternity leave, (or extended medical or personal leave), and they need an interim staffing solution. It’s a great way to save costs, secure talent, and access high level expertise.

At Shvarts Zedkia we observe many of our clients shift towards this model.

They hire Fractional CFOs during their early stages, sometimes in addition to other outsourced functions like a Fractional CMO or Fractional General Counsel.

The Current Landscape in Israel Poses a Growing Need for Fractional Services

The current landscape in Israel poses global economic and geopolitical uncertainty. Early stage funding for startups can be challenging to secure, and investors are demanding to see clearer business models, faster revenue growth, and leaner burn rates. Startups must shine in their vision and leadership, in addition to showing strong traction and operational efficiency.

Competition for top talent remains high, especially for technology roles and in niche fields. And currency fluctuations require sound financial planning to navigate FX risks, especially for companies with global operations.

There is more emphasis than ever on financial discipline, responsibility on running a lean operation, and credible financial reporting to demonstrate the health of a company even in its early growth stages.

In this climate, there is a growing need for expert and strategic financial oversight but without full-time employee expense. A Fractional CFO can manage the cash flow complexities in early-stage ventures with accuracy and accountability, and report to senior shareholders.

Key Benefits for Israeli Businesses

There is much to gain by hiring a Fractional CFO or Outsourced CFO in Israel. Whether you’re an early stage startup preparing for Seed/Series A funding, an SME optimizing cash flow, or even a company expanding into new international markets - the many benefits include:

• Cost Efficiency: High-level financial expertise at a fraction of the salary.
  

• Scalability: Flexible engagement as the business grows.
  

• Strategic Guidance: Help with fundraising, forecasting, cashflow, and budgeting.
  

• Compliance & Reporting: Staying aligned with local and global accounting standards.
  

• Investor Relations: Communicating financial health to VCs and angel investors.

How the Team at Shvarts Zedkia Can Help You:

The team at SZ has tremendous industry experience and local understanding with over 20+ years of work in Israel. We have the ability to integrate even the most complex setups into our accounting systems. As experts in Israeli tax law and reporting standards, we streamline the financial operations of our clients to achieve optimal efficiency.

We believe the Fractional CFO model is ideal for cost-conscious, fast-scaling Israeli businesses. And we encourage everyone to consider our tailored solutions.

Get in touch to see how a Fractional CFO can transform your financial strategy and business today.