Is a Fractional CFO Worth It?

Is a Fractional CFO Worth It?

Hiring a fractional chief financial officer (CFO) gives a company access to highly specialized financial expertise without the commitment of a full-time hire. On-demand access to these skills allows companies to remain flexible, allocating resources only when the circumstances require them. Today, we’ll look at the advantages of hiring a fractional CFO and explore the types of businesses that can benefit most.

What Is a Fractional CFO?

A fractional CFO is an independent expert who provides advice and ensures compliance on various financial issues. As the title suggests, they spend a fraction of their time working for the business. This can be arranged through a part-time contract or on a project-by-project basis. 

Benefits of a Fractional CFO

There are several reasons why a company should hire a fractional CFO rather than a traditional, in-house CFO. These advantages will have greater importance for different types of companies and projects. Let’s dive into each of the advantages. 

Specialized Skills

Hiring a fractional CFO allows the business to select a candidate with the exact skill set its project requires. A traditional CFO may have well-rounded financial knowledge, but it’s doubtful that they’ll be an expert on every type of financial project. With fractional CFOs, the company isn’t limited to hiring one person. It can hire as many as it wants, depending on its needs.
At one stage, a CFO may be needed to help a startup attract more investors. Later on, the business may hire a different CFO to prepare its initial public offering (IPO). And it may then hire yet another CFO to handle a big merger with another company. A highly specialized expert can be hired on a task-based arrangement for each project.

Cost-Effective Flexibility

Hiring a fractional CFO not only gives a company flexibility in choosing a specialist for each specific financial task, but it also allows the business to determine when it should allocate resources to different financial tasks. Not having the long-term commitment of a permanent staff member means the company can hire someone when it’s busy and not have to worry about paying them during quiet times. Paying for work only on a project-by-project basis can be an extremely cost-effective strategy, particularly for growing startups.

Outside Perspective

An outside contractor may be able to assess a situation more objectively than someone who has worked with the company for a long time. Personal relationships, past decisions, and self-interest often cloud people’s judgment. When a company opts for a fractional CFO, it eliminates many of these risks, and the CFO’s recommendations remain untainted.
In addition to being impartial, they also bring a wealth of outside experience. A CFO working for a company full-time can often become a little short-sighted, but when an outsider is advising the organization, they may bring broader knowledge of the current market situation. 

Get a Fractional CFO for Your Business

If you’ve seen how your organization can benefit from a fractional CFO, contact us for a free consultation today. We’ll discuss the options and find a solution that’s perfectly tailored to your business’s needs.

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