You may have heard the term Fractional CFO and wondered what that means. A Fractional CFO is typically a consultant who provides CFO (Chief Financial Officer) services to a business on a part time basis. A Fractional CFO is also referred to as a Part-Time CFO, Outsourced CFO, Virtual CFO, and a Project CFO among other terms.
With a Fractional CFO, smaller organizations that do not have the full-time need or the financial wherewithal of a larger company, have access to the same experience and skills of those larger organizations, at a fraction of the cost.
What does a Fractional CFO do?
Some of the these would include:
- Working with the CEO/Owner to provide Financial Leadership.
- Provide sophisticated analysis to the owners beyond the simple production of financial statements.
- Install best practices to the financial area of the business.
- Assist the CEO/Owner in identifying the goals of the organization and quantifying them by developing forward looking information to the business including a business plan, budgets, and cash forecasts.
- Providing relationship management to the businesses investors, lenders, vendors and customers.
- In environments where the company is raising capital, lead the organization in identify objectives and providing credibility to potential investors.
- Provide mentorship to the company’s current accounting and finance team.
Does your business need a Fractional CFO?
I believe that every business can benefit by having a plan with clear goals for the business, and by having accurate financial data that measures how those results vs. the goals. The amount of time required of the Fractional CFO with the organization would be based on the current needs of the business. In some cases, this might be weekly and in others annually or on an as needed basis.
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