What is a Fractional CFO and Why Might You Need One?

Let’s start was defining the word, ‘fractional.’ Fractional is defined as part-time and in this circumstance, the fractional CFO and/or fractional Controller working for you is doing so on a part-time or contracted basis. While it may sound like a fractional CFO and a Controller have very similar job responsibilities and you only need to choose one for your business, that isn’t necessarily the case. There are many more reasons to enlist fractional CFO services, so it’s best to discuss with an advisor, your board of directors, or a finance professional.

The bottom line is a well experienced CFO will be a valuable asset to your team. It may be time to hire a fractional CFO when your current team members can no longer provide the financial guidance that you need. As an experienced entrepreneur himself, he has served in various C-suite leadership and advisory roles across a wide spectrum of industries.

Expertise In Startup Fundraising

A significant external funding event can signal the point where a business requires a finance professional to oversee the team and provide more forward-looking guidance to the increasing range of stakeholders at hand. A fractional CFO will be effective at this stage by identifying key pain points immediately, knowing how to address them using incumbent staff, and having the initiative to foresee future law firm bookkeeping events down the line. Often, at this stage, companies may not be complex enough to require a full-time CFO or have the budget to justify one. A fractional CFO is a more cost-effective solution for meeting needs as they arise. For companies not mature enough to warrant a full-time CFO position, they can bring in specific expertise to help on varied projects covering the financial and strategy spectrum.

• As with any business arrangement, it’s important to have a solid agreement in place to ensure that both parties are on the same page.
• Many entrepreneurs fail in their first attempts at fundraising because they are poorly prepared.
• At times, a corporate action could put a member at risk of being personally conflicted.
• However, a fractional CFO may have a more focused role, providing support for specific financial areas, such as reporting, analysis, or strategic planning.
• If you’re deciding between hiring a Controller vs CFO, consider consulting with an expert who can determine which would be the best fit for your company.
• He also served as the President and CFO for Interactive Donor, a New York-based Benefit Corporation which incentivizes charity through rewards.

Reach out to us today to discover how our services can help drive your business towards success. Furthermore, businesses consult with fractional CFOs when they require support for financial decisions. They may want insights on where to focus their efforts, how to improve cash flow, or streamline processes for financial efficiency.

Accomplish Goals

This level of independence allows you to be the CFO maverick, forging your own path in the financial world. “An advantage is that you can kind of stay above the fray of office politics because you’re an outsider,” DeGolier says. Working as a fractional CFO, he didn’t have the same trepidation as a full-time permanent C-suite leader, he explains. There’s less fear “you’re going to lose your job and be unemployed after it’s over because you’ve got multiple clients,” he says. Fractional Chief Financial Officers (CFOs), also known as virtual CFOs, are becoming more popular for businesses to use.

This person may work independently or under the employment of an outsourced firm. They are paid on a purely hourly basis and only for the time spent catering to the client organization. While there may be some time spent at the client company for various reasons, this type of CFO generally works remotely, given that they also serve other clients in their portfolio. Consider gaining experience in different sectors to broaden your skills and expertise. This can include taking on consulting or advisory roles, or even volunteering your services to non-profit organizations. It is of particular importance when a business is in its growth stage that the growth be managed carefully, as growing at too quick of a pace can be risky to a business.