What is a Fractional CFO?

In some cases, however, the company may have an existing CFO, and the fractional CFO acts as a partner or advisor or helps lead separate projects such as raising capital or navigating an audit. An interim CFO is sometimes an existing employee with financial expertise temporarily promoted to that role as a tryout as acting CFO. If competent, assuming a good culture match, the interim CFO may later be chosen as the successor Chief Financial Officer after competing with outside candidates. Fractional CFOs understand small business finance and lean organizations with fewer resources.

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. When different CFO role elements are required on an intermittent basis, it’s time to bring in fractional talent. The right time to hire a fractional CFO depends on a company’s stage of growth or financial tasks at hand.

Core Values Callouts Bring Your Team Together

This way, other decision-makers can understand the company’s financial situation, and everyone stays on the same page. Fractional CFOs can guide founders through best practices for startup accounting and bookkeeping as well as  helping you prepare for any potential risks. For example, accounting software alleviates manual entry and daily tasks needed for proper accounting. Fractional CFOs research options thoroughly to pick the right software for your startup. As your business grows, you need someone to help keep up with the changing financial landscape.

• This way, they can make informed business decisions and plan ahead with peace of mind.
• Gary serves clients by offering them proactive tax advice, business advisory services and consulting work as a fractional CFO.
• By becoming a fractional Chief Financial Officer (CFO), you can use your expertise to help multiple companies grow while also having the time and energy to enjoy your own life.
• Robert Half is a large accounting and financial placement services company for temporary and full-time employees.
• A CFO may resign during these times, or investors may look to start a clean slate and appoint their chosen figurehead.
• On the other hand, traditional CFOs tend to stick to a single industry and don’t move as often.
• A fractional CFO (sometimes called an outsourced CFO or virtual CFO)  is a financial professional who provides CFO services on a part-time or project basis.

Understand that, when hiring a CFO, 20% is experience and skills and 80% is how you like them as a person and a partner. Your new CFO, although a part-time CFO, will act as your strategic partner and advisor while you grow your business to reach your goals. Typically, a company will hire a fractional CFO to provide the same services that large companies get from a full-time CFO, but at a lower cost.

Why do companies use fractional CFOs?

Experienced fractional CFOs can assist companies with these types of projects and problems that many companies face as they grow. A fractional CFO may serve as a turnaround specialist to improve https://www.bookstime.com/articles/fractional-cfo cash flow and profitability and obtain additional financing. Fractional CFOs can consult with a company to recommend new software for added efficiency or improve their financial systems.