Welcome back for Part 2 of a look into what it means to hire a fractional CFO. The CFO is focused on the present and the future. If the future is changing, you need financial leadership focused on that future. How many businesses could have used a CFO to navigate the unimaginable challenges businesses have faced thus far in 2020?
But it may not make sense for every business to keep a full-time, in house CFO on salary. That’s where this idea of fractional hiring comes in. Let’s get straight to the point: What are the actual pros and cons of hiring a fractional CFO?
Benefit: Cost. CFO’s are generally the second or third highest compensated person in an organization. In short, they tend to be expensive. If you can get the advice and leadership you need, for less, that’s great!
Pitfall: You don’t have 24/7 access to your CFO. When you timeshare your CFO, they have to fill the rest of their work hours with other paying clients.
Benefit: Fractional CFO’s learn from other companies. They get experience solving problems or spotting opportunities while working for other organizations, and they can bring that learning back to you.
Benefit: In most organizations, CFO’s become trusted partners with the CEO’s. They are sounding boards for the leadership of the whole company, bringing the unique perspective of finance to all business functions. If hiring a fractional CFO brings this kind of collaborative leadership into your organization, that’s a very good thing.
Back when I had a traditional accounting firm, I would sometimes take on CFO projects for clients. I loved these engagements, but the CPA practice always got in the way. Eventually, I left accounting to be the COO of a thriving company. When I came out of that industry, I intentionally created Harvard Grace to provide fractional C-level management services because I see the difference it can make in the trajectory of a business’ growth.
If you’re still thinking about whether or not to look into a fractional CFO for your own company, check out these articles: