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Is a Fractional CFO or Controller Right for Your Business?

Finding someone with that level of skill on a full-time basis is cost-prohibitive for many companies, very time consuming, and can take up to 6 months—making fractional CFOs and Controllers a much more attractive option.

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Finding someone with that level of skill on a full-time basis is cost-prohibitive for many companies, very time consuming, and can take up to 6 months—making fractional CFOs and Controllers a much more attractive option.

The events of 2020 have impacted businesses throughout the region and left them with challenges that were perhaps unanticipated when the year began. Finding ways to save on operational costs is always a priority for any company and has gained heightened importance over the past several months. As businesses look for creative ways to save without impacting their ability to deliver for customers, one potential area they can explore is what is known as a fractional CFO.

What Does Fractional mean?

A Fractional CFO or Controller is a trained and experienced professional who, rather than being a full-time employee, can provide services for an organization on a part-time, interim or as-needed basis.

The immediate cost savings are indeed palpable—rather than spending on a full-time salary, benefits, bonus, stock compensation and other incentive packages, paying a part-time salary can maintain the same level of service at a fraction of the cost.

This is particularly useful in small to mid-sized businesses, for many of whom it is challenging to have a full-time CFO or Controller, when perhaps all that is needed is someone to work on an as-needed basis.

Being able to cut costs at this level can allow the business to commit more resources to focus on the core business, thus ensuring financial stability well into the future.

Advantages of Hiring a Fractional CFO or Controller

What’s more, where a full-time CFO or Controller who is in charge of a company’s entire financial strategy, or even an interim person who provides a transition between full-time employees, the fractional team will support your business just like a full-time person would.

Among the areas in which a fractional CFO can specialize are:

  • Strategic planning
  • Funding strategies, plans and sourcing
  • M&A and integration
  • Contract review and negotiation
  • Cost reduction and liquidity improvement
  • Pre IPO housekeeping
  • Internal control review, supporting tax preparation and audits
  • Monthly financial statement preparation and management reporting
  • Cash-flow modeling and forecasting
  • Setting up new ERPs

So while their time may be limited in scope, the expertise and laser focus that a fractional CFO or Controller brings can help keep the company centered on its top financial priorities, without the distractions that sometimes come with the role of a full-time executive.

The length of engagement for a fractional person can obviously fluctuate based on a company’s specific financial situation and immediate needs—some arrangements last for a short-term period of as little as 90 days, for other clients our fractional team has been with them for more than 15 years!

The key is having the right person on board during that most critical time, someone who is able to take an unbiased look at the business, forecast what is to come, and then build an appropriate plan.

What to Look for When Hiring a Fractional CFO

Finally, there is the experience factor—a company can have the luxury of having a high-level financial executive who has navigated this terrain before, working at a much more realistic cost. Fractional CFOs and Controllers come skilled in reducing debt, restructuring an organization, spearheading mergers and acquisitions or even finding new paths for the business to follow.

Finding someone with that level of skill on a full-time basis is cost-prohibitive for many companies, very time consuming, and can take up to 6 months—making fractional CFOs and Controllers a much more attractive option.

Naturally, choosing to work with a Fractional CFO or Controller is a decision that has to be made strategically and with a specific scope of work and timeframe in mind. But if the right fit can be found, those companies that have gone the fractional route have seen success as a result.

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