Dec 12, 2022

What is a fractional CFO?

A fractional CFO, or Chief Financial Officer, is a finance professional who works on a part-time, retainer, or contract basis. They bring the experience and expertise of a high-level CFO to your business – without the cost of hiring a full-time, in-house employee.

Fractional CFOs service several clients at once typically on a part-time, retainer, or contract basis. Their specialty is providing outsourced CFO services to small and medium businesses.

Because their financial management skills are so well-developed, it’s common to bring one on board to help navigate a challenge. Read on to learn more about what a fractional CFO does.

Navigating Challenges

Small businesses and startups typically have a streamlined staff, which keeps costs down and allows the business owner to focus on healthy growth.

But sometimes, a financial challenge comes up that is beyond the skill or experience level of those on the team. This is where a fractional CFO can be of great benefit. Some of the issues they assist with include:

  • Cash flow problems
  • Low gross margins
  • High expenses
  • Existing systems that are no longer working
  • Cost cutting analysis
  • Getting through an audit

Hopefully, these situations don’t come up often, but when they do it’s beneficial to have an expert on your side to guide you through.

Achieving goals

Most businesses start with a similar formula–invest your time and money, create a product or service that customers want, and earn money by providing that product or service. Maybe you envision your business expanding somehow, or scaling up. Perhaps an exciting opportunity comes up but you aren’t sure how to take advantage of it.

A fractional CFO can help you make your dreams a reality by deciphering the numbers. They will look at where you are now and help you plan where to go next. This includes:

  • Ensuring the books are in order
  • Performing financial forecasts
  • Attending board meetings to get a sense of the company
  • Helping with strategic relationships
  • Overseeing due diligence

There are plenty of ways a fractional CFO improves your operations. The specific skills and experience they provide will clarify your situation and help you achieve what you want.

Managing growth

Taking your business to the next level can seem daunting. You want to grow, but you don’t want to risk your success by taking on too much or making a damaging misstep.

Hiring a fractional CFO will help you navigate the steps ahead. If you’re already growing at a rate that makes you feel like you’re losing control, they will help you retake the reins.

A fractional CFO will help by:

  • Breaking down large amounts of financial information into helpful data
  • Making a plan to develop existing employees and their skills
  • Identifying the need to hire new employees to manage growth
  • Implementing systems that will work going forward
  • Exploring causes of revenue loss and cost overruns and developing solutions to address them

Ultimately, a fractional CFO is helpful to guide you through the growth process so that you can feel confident as your business expands.

Final Thoughts

Many small- and medium-sized businesses and start-ups could benefit from the services of a CFO, especially during a growth stage, but the cost of hiring one in-house might be out of reach. By hiring a fractional CFO on an as-needed basis, you can enjoy the benefits of their expertise without breaking the bank.

Contact us

Take our quick Financial Health Check now!

Take our obligation free Financial Health Check to determine whether you may benefit from financial advice, you first need to understand what a financial adviser actually does and then establish whether your specific circumstances can be improved.