What is a Fractional CFO?

A fractional CFO provides the same expertise of a regular CFO, but on a part-time, as-needed basis. They bring their years of experience in finance leadership and strategic planning to your business without breaking the bank. A fractional CFO acts as a financial advisor to your company, working with you to oversee financial focuses and driving your growth strategy. Their expertise includes everything from financial

reporting and planning, to cash flow management, budgeting, forecasting and more. With the guidance of a fractional CFO, your business can grow, operate smoothly, and make strategic decisions with confidence.

A fractional CFO is also flexible, providing you with the freedom to scale up (or down) their services as your company grows. The flexibility is a valuable asset, and you can focus more attention on utilizing your nearest and dearest resources while making strides towards your objectives with less doubt. Furthermore, a fractional CFO, belonging to a finance community, has access to deep expertise, benchmarking tools, and industry-specific guidance to bring to your company's job table.It can be time-consuming and challenging to analyze your finances and plan for the future. Doing so, however, is essential if you’d like to make smart decisions that steer your business toward success. 

Since every business is unique, it may not make financial or strategic sense to hire a full-time Chief Financial Officer (CFO),  a fractional CFO can be a great option. A fractional CFO has the level of experience and skillset of a full-time CFO but offers their services on a part-time or project basis. They are also known as a part time CFO or an interim CFO.

When to Hire a Fractional CFO

You may want to consider these services if:

• You’re a Smaller Company: If you are a small business, you could benefit from a CFO but can’t afford the high cost of a full-time, expensive employee, a fractional one may help. 
• You’re Working on a Specific Project: They can support you with a variety of special projects like preparing for an audit, applying for a bank loan, raising equity funding, or navigating a sale or merger.
• You Have a Financial Issue: You may need one to solve your cash flow issues, spending challenges, or other financial roadblocks.
• You Lost Your CFO: If you used to have a full-time CFO on staff and suddenly lost them, a fractional one can take their place until you find a qualified replacement. 
  

• Money Savings:  You gain access to the extensive knowledge and skills of a senior level financial professional without the hefty cost. You won’t have to pay them a sky-high salary or cover their benefits, this will help you with cash management.
• Flexibility: They can assist you with virtually any financial endeavor. They will provide high level fractional strategy & leadership that are custom tailored to your unique needs and goals.
• Smarter Decisions: Can help you make smart business decisions that prevent costly mistakes and reduce the risk of loss. These decisions may be related to product development, capital investments, business expansion, or anything else that’s important to your organization. 
• Improved Internal Controls: Shared CFO services can lead to timely and accurate financial statements as well as better control of your business assets. They may also reduce your risk of fraud!
• Greater Productivity: When a fractional CFO handles various financial and administrative functions of your business, you and other leaders can free up your time and focus on other tasks that enhance value. 

Difference between a Controller vs CFO

Although there are differences between a controller and a CFO, they are not always well-defined. In some organizations, there may be overlap in the duties that both employees perform. 

A controller is mainly responsible to provide accurate financial reporting to the business. They prepare reports like income statements and balance sheets while also monitoring internal controls, supporting audits, and assisting with budget data. While a lot of the controller’s work lies around helping manage and guide compliance, one of their biggest “value-adds” to the business owner and management teams is their management of working papers. At the end of every month - or other period - the Controller spends a bulk of their time confirming that the underlying data within the general ledger is properly recorded, along with reconciled into the working papers so you, the business owner, can always see the underlying detail to the balance sheet. 

To oversimplify, a CFO’s responsibility lies around the financial strategy and communication with key stakeholders - everything from the Board of Directors to investors or internal decision makers. These financial tasks normally include forecasting, planning and analysis. A CFO will manage everything from the budgeting process - pulling the data from the Controller - through to the forward looking strategy around the best use of resources. While many think of the CFO as someone who is solely focused on money, their job is much deeper than that. The CFO must be familiar with all parts of the business that they’re working with. They must be able to distill strategy - everything from people and resources - back to how it impacts the business financially.

Think of the Controller and their team as the ones writing the story, whereby the CFO and FP&A team will be the ones interpreting that story.