The Advantages of Hiring a Fractional CFO


advantages of a Fractional CFO
The Advantages of Hiring a Fractional CFO

One of the challenges of being a small business owner is that you are not a jack of all trades. You may be able to handle all aspects of your business when you first start your company but you will find yourself overwhelmed or stretched too thin as your company grows.

Eventually, you will need to outsource certain aspects of your business operations. If you want to improve your finances, you can contract a chief financial officer, also known as a fractional CFO. A fractional CFO, or an outsourced CFO, is an experienced chief financial officer hired to work for a company, typically part-time. This CFO is not an employee of the company but should be a valuable team member.

10 Reasons to Hire a Fractional CFO

  1. Better Financial Information – Accurate and timely financial statements and management reports that include projections, actual results versus forecasts, cash flow forecasts, and other KPIs that improve insight and promote proactive management.  The goal is to increase visibility and efficiency to increase net income.
  2. Improved Decision Making – Basing decisions on accurate and relevant financial information allows the business owner the opportunity to avoid making wrong or costly decisions.  Key decisions include growth strategies, cost management, financing and business investments, and staffing, among others.
  3. Team Member – The CFO becomes embedded in the company and acts as part of the management team. The CFO, while virtual, is always available, given today’s technology. It’s like having them sitting in the office with you.
  4. Internal Controls – Financial controls can provide many benefits, including accurate financial statements, improved control of company assets, and greater financial visibility.  Another “set of eyes” also reduces the chance for errors or fraud.
  5. Specialist Skillset – A Fractional CFO is, first and foremost, a business professional with experience within various business enterprises.  A Fractional CFO is exposed to many other businesses through their clients, and they bring that knowledge to their business.  A significant difference between a CFO and a CPA is that a CFO can solve many financial and business problems because they have experience doing just that. They can quickly identify and address issues and bring their expertise to bear using best practices to solve those issues.
  6. Increased Productivity – Hiring A Fractional CFO to perform the financial and administrative functions of the business frees up the business owner so they can focus on “doing” the business, rather than trying to “run” the business. In addition to bringing financial and accounting expertise – a CFO can deal with administrative areas such as human resources, facilities, insurance, legal and compliance, IT, and banking relationships.
  7. Perspective – A CFO can improve decision-making by helping owners ask the right questions and base decisions on facts. A Fractional CFO provides a fresh perspective to the owner, often seeing things differently.  A Fractional CFO can be a sounding board and trusted advisor for new ideas and initiatives. There is also the added benefit of making life a little less lonely for the entrepreneur. We all know it’s lonely at the top.
  8. Flexibility – By using A Fractional CFO, the level of involvement can be varied and customized to the needs of the organization. The ability to ramp up or down the efforts of A Fractional CFO, allows the organization to increase the level of support when needed and then adjust it when not required.  That flexibility is not an option with a full-time CFO.
  9. Stakeholder Confidence – Stakeholders, such as lenders and creditors, react positively to the knowledge that a professional CFO is part of the management team. This is important when looking for outside investment, debt financing, or positioning the company for sale.
  10. Cost – A Fractional CFO can bring all the benefits in terms of skills and knowledge of a full- time resource, at significantly less of the cost.

Frequently Asked Questions about hiring a Fractional CFO

1. When and where do fractional CFOs work?
Fractional CFO’s typically work remotely based upon the agreed upon contract or statement of work.  The amount of effort will vary based upon client size and needs.

2. Does a fractional CFO work exclusively for one company?
Typically, no. A Fractional CFO determines their workload and most likely works with many different companies in various capacities.  This is one of the values of working with A Fractional CFO. 

3. What are the qualifications of A Fractional CFO?
Fractional CFOs typically have an accounting background and have typically served in the CFO role for a company or companies on a full-time basis.  It is important to work with a Fractional CFO who has experience with the size of your company.  Small business owners face challenges that do not exist at larger organizations.  A CFO from a large company may not be able to relate to your business.  Industry is less important, as small business owners face universal “business issues” that are typically not unique to industry, but rather to size.

4. How much do fractional CFOs cost?
A fractional CFO brings all the benefits in terms of skills and knowledge of a full-time resource but at significantly lower cost. The cost of this role depends on the tasks and responsibilities defined within your agreement.  Generally speaking, a Fractional CFO costs between $1,000 to $6,500 per month. Considering that salaried CFOs earn an average of $383,000 per year, hiring A Fractional CFO is extremely cost-effective. 

5. Where do I find a fractional CFO to hire?
Right here. We can help! Get started today with a free consultation. 


Save Time and Solve Financial Problems with One Hire

To summarize, a fractional CFO brings all the knowledge of a full-time resource but at a fraction of the cost. They work for an agreed-upon amount of time and on an ongoing basis. Most smaller organizations do not have the need for a full-time resource, let alone the financial wherewithal.

A Fractional CFO will:

  • Improve reporting
  • Provide financial analysis of results
  • Implement tools to improve decision-making
  • Offer clearer insight into the business for planning and forecasting
  • Implement financial management and controls

The most significant benefit, however, is how the CEO or Owner can transfer the financial and administrative burden to the CFO and thus free themselves to work on other critical aspects of the business.

If you’re ready to free up your time, A Fractional CFO is happy to assist – contact us today!

About A Fractional CFO.
Founded on the belief that all companies, not just large companies, can benefit from experienced financial professionals. A Fractional CFO leverages years of experience in various businesses, both large and small, from professional services to wholesale, retail, and manufacturing, giving us a unique skill set of experiences to help other businesses thrive, grow, and reach their full potential.

Tony Fremarek is the Founder of A Fractional CFO, LLC with offices in Plainfield, IL and Fort Myers, FL.