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Fractional CFO

9 reasons to hire a Fractional CFO

April 28, 2023

Fractional CFOs bring stability and flexibility to businesses

From the SeasonedPros.ca Insights Lab

Chief Financial Officers who work part-time or fractional are one of the most in-demand specialists as businesses grapple with talent shortages.

The COVID-19 fuelled the demand for fractional talent in financial operations as businesses scrambled to make unanticipated financial decisions. But the trend towards part-time professionals has been growing for the past decade.

Fractional CFOs are experienced professionals who lead financial decisions on budget allocations, cash flow management and financial management processes.

They also look forward to help businesses with strategic decisions on financing, forecasting, stock options programs, and future mergers and acquisitions. They act as key liaisons with bankers and investors.

The bonus is that they can do this at a fraction of the cost and time. Depending on the cycle of the company, the fractional CFO can set the foundations for growth. 

9 reasons to hire a fractional CFO

  1. Help businesses make good financial decisions – Fractional CFOs guide businesses through key financial decisions.  They create up-to-date financial data to advise leaders on scaling up during growth periods and minimize the impacts of downsizing.
  2. Create solid financial processes and controls – Tight management of revenues and expenditures can reduce risk if financial processes are consistent, repeatable and efficient. Timely access to financial data keeps a business agile and nimble so that important decisions can be made promptly.
  3. Prepare books and processes for tax filing– Fractional CFOs are not necessarily tax specialists but they understand the formats and templates businesses need to file taxes. 
  4. Creating budgets and forecasts – Solid financial controls can help a business understand its position so that it can plan confidently for projects, future hires and growth.
  5. Managing relationships with financial partners – Banks, auditors and investors require regular financial reporting with standardized income statements, balance sheets and cash flow statements.  Financial partners also require someone in the business who can answer questions in a timely manner.
  6. Raising funds – Fractional CFOs can analyze a business’s position and growth potential and develop a strategy for acquiring funds for growth or managing a cash crunch. They assess whether a company should negotiate debt from a bank or raise capital through an equity investment. 
  7. Responding to unanticipated financial crises – The COVID-19 pandemic is an example of a time when businesses needed good financial data to plan for sudden change and business continuity. A fractional CFO helps leaders anticipate financial challenges and brings knowledge on how to respond.
  8. Training financial teams – As companies grow and financial operations expand, there will a need to add bench strength. An experienced financial advisor can train teams to use and execute financial systems that keep business operations healthy and financial partners happy. 
  9. Transitions – A fractional CFO is a critical bridge when a permanent CFO has exited the position. The fractional CFO keeps the business on track and prepares teams for new financial leadership.

Perhaps the greatest advantage to the fractional CFO is the flexibility. They can be hired on contract to fill a void without the long-term commitment and cost of a full-time hire. Fractional CFOs can evolve with the needs of a business as it cycles through periods of growth. 

SeasonedPros.ca is an on-demand business talent source. Clients with an immediate need for experienced talent trust us to source professionals for fractional, interim and part-time roles. Each professional in our national database has 20 + years of business experience. We provide our clients 2-4 four vetted professionals in 10 business days or less.

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