Although the phrase "fractional CFO" sounds like complicated math, it’s really a simple concept – take a full-time CFO and ask him or her to work for your company for less than full time (so, a ‘fraction’ of his or her time).
Some of you will ask, “OK, so what is a CFO?” CFO stands for Chief Financial Officer, the member of the executive team with the most responsibility for the financial health and financial outlook of the company. In most companies, the CFO oversees the following departments: accounting and reporting, financial planning and analysis, legal and risk, taxes, and depending on the size and the industry, they may also oversee human resources, payroll and information technology.
A fractional CFO is a part-time contractor that has all the skills of the full-time CFO but offers them to you on either a project or part-time basis.
When to Use a Fractional CFO
Hire a professional to handle CFO duties, but only when you need them. You might bring one in for a special project, like applying for a bank loan; for a big "event," like an audit; for guidance in expanding your current accounting system because you added a new division; or maybe to adjust your financial forecast because you're launching a new product. You might also hire a fractional CFO if your full-time CFO leaves and you must search for a new one.
Smaller companies might utilize a fractional CFO on a regular basis just for financial oversight. Many companies that utilize fractional CFOs are at a point in their growth where they need the extra expertise but can’t afford to hire someone full time. Fractional CFOs are perfect for this situation because instead of receiving a full-time salary and benefits from you, they’re generally paid by the hour and their benefits are covered by the company they work for. Fractional CFOs may also work remotely, requiring no office space.
Finding the Right Fractional CFO
As with any position in your company, it’s important to find the right fit. Not all individuals claiming to be fractional CFOs are qualified or trustworthy – two critical characteristics for someone handling your finances. A good fractional CFO has experience from working with multiple companies in multiple industries at various stages of development.
For high-quality fractional CFO services, contact Harbour Rock. They provide CFO services on an as-needed, contractual basis as well as provisional or temporary services. Their seasoned professionals can help you deal with your problems, grow your business, and/or fill the gap left by a valued employee.