What to Expect When You Hire a Fractional CFO

Professionals in this position tend to set rates depending on the complexity and scope of the work requested, as well as the existing state of the company’s financials. Joining a fractional CFO network can provide access to clients, additional resources, and support. These networks can also provide training and development opportunities to help you grow in your role. Research different networks and determine which one aligns with your goals and values. A CFO typically works on a full-time basis, while a fractional CFO can be hired for a more flexible arrangement.

• Progressive companies recognize that it’s no longer enough to tap into historical data and use it as a guide to making future decisions.
• A fractional CFO agreement can look very different based on the business need.
• Testimonials are not a guarantee, warranty or prediction of what your experience with us will be.
• In addition, the scope of work can expand or shrink, along with the cost of services.
• To become a fractional CFO, one typically needs at least 15 years of experience working in finance and at least a few years of prior experience as a CFO or VP of Finance.

That can cover a lot of territories, from making financial forecasts to preparing board presentations to evaluating a sales team’s productivity, and much more. With the benefits of fractional work becoming more and more apparent, it’s no wonder that so many CFOs are leaping into this exciting realm. As with any business arrangement, it’s important to have a solid agreement in place to ensure that both parties are on the same page. What you make as a fractional CFO varies but you can expect anywhere between $150 to $500 per hour (with $300 being the overall average hourly rate). But with the right combination of education, experience, and networking, it’s an attainable goal. Whether it’s spending more time with family or pursuing other interests, being a fractional CFO means your schedule is yours.

When Does a Company Need a Fractional CFO?

Many startups are run by entrepreneurs who may not have a background in finance. As a result, they may struggle to understand their true financial situation. Fractional CFO accounting services can help a startup make sense of its financial reports and provide the insights and guidance needed to make better business decisions. CFOs focus on financial operations, management, and strategic planning to aid founders in decision-making.

A fractional CFO is a Chief Financial Officer who works part-time for multiple companies, handling various financial operations and financial management responsibilities for each one. Fractional CFOs allow for smaller companies, including startups and small businesses, to get expert financial help without paying hundreds of thousands of dollars per year for a full-time CFO. In the early stages of growth, a company might start building a finance team by first hiring a bookkeeper for basic accounting duties. Next on the priority list is usually a controller, who’ll perform financial planning activities. CFOs typically work for larger companies that have more complex financial operations, while fractional CFOs often work with smaller or mid-sized companies. This is because smaller companies and startups may not have the resources to hire a full-time CFO, but still need the expertise of a financial executive to help manage their operations and growth.

Know other fractional CFOs who should be on the list? We love making new connections.

However, companies at this level may want to consider bringing on a fractional CFO on an interim basis in the event of a takeover or restructuring. A modern CFO’s responsibilities are varied and complex; thus, each company’s role requirements will vary depending on their situation. For some businesses, hiring a full-time CFO is beyond their needs and financial capabilities, despite the many apparent benefits gained from the leadership and strategic knowledge of a hire.

• In many ways, you can use your financial expertise to make a real difference.
• It needs to be prepared by a competent individual or firm and approved by the Board of Directors.
• While a CFO offers many of the same services as a fractional CFO, the main difference is in the time commitment.
• These costs may mean you end up overpaying for a full-time CFO instead of hiring a fractional CFO.
• For example, when the economy slows and growth assumptions have to be pared back, you will have to make some difficult decisions.
• Integrate a CFO’s unique perspective, expertise, and insights to maximize opportunities for your business.

Ultimately, these startups can go public or sell their startup compared to startups that tend to their own slim budgets. Running a startup is a delicate balance between managing money and making critical hires to move forward. We wouldn’t have been able to expand without hiring a fractional CFO to help us manage our finances.

Steps to Prepare for Raising Capital

From start-ups to enterprises, you can offer your expertise and guidance to a wide range of businesses. This keeps your work fresh and exciting, while allowing you to continue learning and growing as a finance professional. In simple terms, a fractional CFO performs the same function as a full-time CFO, just on a part-time basis. A CFO is accountable for a company’s administrative, financial, and risk management operations, including developing long-term Running Law Firm Bookkeeping: Consider the Industry Specifics in the Detailed Guide financial and operational strategies and the metrics used to gauge progress. A CFO also creates and maintains control systems designed to preserve a company’s assets and report accurate financial results preventing any surprises. A financial controller is essentially the lead accountant for a business, overseeing and directing financial activities, including financial management, compliance, and accounting and record-keeping operations.

They can also help startups prepare for tax season, ensuring that your tax returns are accurate and filed on time. Fractional CFOs can help with any financial task you agree on, mainly related to financial planning and analysis. Read on for everything you need to know about these services and tips to help you determine if hiring a fractional CFO is right for your business. For example, the current economic state has businesses tightening their budgets. Without advice from a CFO with startup experience, founders may be unable to fully prepare for this kind of change.

As a decision-making tool, financial data needs to assess where your business is today and where you want it to be tomorrow. A fractional CFO also works less than full-time for your business, but in a way that is distinctly different from how a part-time CFO operates. The fractional CFO is an outsourced expert who comes in for a finite period of time, usually to help your company prepare for growth or address specific financial issues. They may return for another engagement in the future, if needed, but they do not work with your company on an ongoing, long-term basis like a part-time CFO does. After a more than 20-year career as a full-time CFO and in other financial leadership positions, he had an “aha moment” when taking a CFO role with a small, early-stage software company. “I was the controller, the accounting manager, and the payroll manager.” But he wanted to just focus on the strategic part of being a CFO, he says.

• It is a cost-effective way for small businesses to utilize professional finance and accounting without the commitment of a full-time hire.
• Our four-person teams come into your business to work with your existing team or serve as your entire accounting department and help your company thrive.
• Fractional CFOs and interim CFOs are not the same; however, people often conflate these terms to mean the same thing.
• 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.
• But, if your business cannot afford a full-time accountant yet, consider a fractional CFO.
• In these cases, a fractional CFO can be parachuted in as an interim board member to oversee the event, free of any conflicts.