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What Is a Fractional CFO and Do I Need One?

what does fractional cfo mean

Companies that place fractional CFOs may even guarantee their schedule. Audits can be unnerving for business owners to go through and having an expert to advise and assist you during an audit can be beneficial. CFOs can take over that function for you and answer questions the auditors may be asking.

  • A CFO who charges a high hourly rate may not be the best choice for a small business.
  • “If you can get a highly experienced CFO on your team for just a day or two a week, they can really move the needle,” he says.
  • Rates usually depend on your location, industry, and level of experience.
  • Whether it’s time to hire a CFO or not, our team is committed to providing you with the perfect level of financial management services that are tailored to your unique business needs.
  • Unlike a full-time CFO, a fractional CFO does not have the responsibility of day-to-day financial management, but instead focuses on long-term planning and growth.

Fractional CFO services typically include the same services as a full-time CFO, but on a smaller scale. Most of them will carry out a wide range of tasks to help companies achieve their overarching goals, but there are some specific areas of strength this role can bring. Fractional CFOs help maintain your company’s financial viability on a contractual basis. Fractional CFOs have a wide range of industry-specific financial expertise because they work with different companies in various industries. The role of your CFO is to approach your company’s financial health from a broader, more strategic vantage point.

Is a Fractional CFO worth it?

But first, let’s dive a little deeper into what a fractional CFO really does and the various benefits of hiring a fractional CFO, so you can determine if this is the right option for your company. Let’s say your company is struggling to stay afloat because your clients pay at different times. A fractional CFO could come up with a new plan for billing or negotiate better payment schedules. So, if you want to grow your startup into a new market for example, a fractional CFO can help you figure out what that might cost and what kind of profit you could expect. That way, you can have reliable forecasts and budgets at your fingertips. With rich experience across multiple industries, our CFOs provide insights that lead to better strategic decisions.

With a service, you gain an entire team of financial and accounting professionals, all of whom support the CFO role. This division of duties can make a fractional CFO service an affordable one-stop shop for replacing an in-house accounting team. As a comparison, A full-time CFO’s salary will vary depending on the industry and location but averages at a base of $200,000-$250,000 per year. So when factoring in bonuses, benefits, equity, and overhead — you could be looking at over $300,000-$400,000 annually. That means hiring a CFO on a part-time basis can easily deliver over 50% in cost savings. Kruze is trusted by hundreds of companies, and we understand the unique challenges startups face.

Bookkeeping Basics PDF for Small Business Owners

I worked alongside the owners of the practice as we navigated through these difficult times. The changes I suggested, along with giving them the time they needed to be fully implemented, allowed the practice to come out on the other side poised for success. Almost two decades later, I am happy to report that their practice remains what does fractional cfo mean on solid financial footing. Probably the most obvious advantage is the ability to have a seasoned veteran on the team at a fraction of what it would cost to hire a full-time equivalent. Most fractional CFOs also have experience with many different companies. This allows them to have a very unique lens to view the company through.

This type of schedule gives you the freedom to prioritize what matters most in your life. When companies have scaled enough that the complexity of finance requires more expertise, they’ll often consider hiring a fractional CFO. In addition to providing fractional CFO services, BerganKDV provides an array of business, financial and technology solutions. The unique aspects and nuances of your industry may require specialized knowledge. Many fractional CFOs choose to have a specific industry focus, allowing you access to a sophisticated knowledge base and industry relationships that you otherwise might not be able to tap into or afford. A Fractional CFO does all the same things as a full-time CFO, but the scope of work can be tailored to the specific needs of a company.

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