Financial decisions only become more complex as your business flourishes. It’s hard to be an expert in your industry and be your own CFO at the same time. So, what should you do when you know it’s time to hire someone with a strong financial background to help you strategize, but aren’t sure it is feasible? 

Fractional CFOs are a great option for businesses facing this dilemma. It offers flexibility and expert financial navigation without the cost of a full-time employee. An important distinction between a CFO and other financial professionals, such as bookkeepers, controllers and CPAs, is long-term future planning. CFOs consider where you’ve been, where you are and how to get you where you want to go.  

What is a fractional CFO?

Fractional is used as a catch-all term. It’s used primarily in reference to CFOs brought in on a contract, interim, project, virtual or part-time basis. Every business is different and there are plenty of flexible options to suit your individual needs. This is a more flexible and cost-effective way to access top-tier strategic guidance and financial expertise, without incurring the costs and commitments associated with hiring a full-time CFO. 

What are the benefits?

Having a fractional CFO takes a huge burden off your plate so that you can focus on other important factors of your business. The benefits of hiring a fractional CFO are extensive: 

• Cost effective: It is extremely cost effective for the level of expertise your business benefits from when hiring a fractional CFO.
• Flexible: The flexibility offered by this option is a great perk. CFOs are able to model their services based on your company’s needs, adapting as they continue to learn more.
• Depth of experience: The beauty of a fractional CFO is their diversity of experience. They’ve often done work across a large variety of industries and situations, which brings a fresh perspective and particularly adept skills.
• Long-term strategies: CFOs help to boost strategy behind financial decisions, going beyond what’s only right in the moment. This translates into long-term cash flow and financial improvement. 

When should you consider hiring a fractional CFO?

Some common business situations that may trigger a need for a fractional CFO include:

• System implementation: One such occasion for hiring a fractional CFO would be if you’re in need of system integration. They can facilitate the integration of new financial systems and technologies, assess what your current processes look like and identify any inefficiencies.  
• Business growth: If your business is experiencing a lot of growth, especially if it’s occurring quickly, that means the complexity of your finances is probably increasing. Situations like this can become overwhelming for a new business owner. Bringing in an expert to help you navigate growth, or even potential strain, in a proactive manner will allow you to keep your focus where it is needed most.
• Detected issues: Any cash flow issues should be addressed by an expert. As soon as you spot any leaks, it’s time to seek out a CFO. It’s their job to spot all opportunities to optimize cash flow and grow margins. 

The nuances behind hiring a fractional CFO, and the factors that determine which specific type you need are numerous. The main takeaway is that there is always a solution that suits your needs.