As an entrepreneur, startup, or SME, you might find it challenging to get financial guidance to manage cash flow, secure funding, and develop financial strategies. Hiring onsite employees can strain your budget.

Now, what’s next in this scenario?

You can hire a fractional CFO or fractional chief financial officer instead of the onsite CFO to manage your business accounts seamlessly.

But Fractional CFOs, What is this, who are they, and what do they do for your business? 

This blog post is about a detailed overview of fractional chief financial officers.

Let us begin by getting to know them.

What is a Fractional CFO?

A fractional CFO, or part-time CFO, is a financial expert who works with multiple organizations on a contractual basis or offers part-time CFO services rather than being a full-time employee of a single company. 

They typically have extensive previous CFO-level experience and offer strategic financial and operational support to companies that don’t require or aren’t prepared for a full-time CFO.

Which Types of Companies Can Benefit from a Fractional CFO?

A fractional CFO can be a valuable asset for various types of companies, particularly those that need high-level financial expertise but cannot afford or do not require a full-time CFO. Here are some types of companies that can benefit from a fractional CFO:

Startups

Early-stage companies often need financial guidance to manage cash flow, secure funding, and develop financial strategies. A fractional CFO can provide this expertise without the cost of a full-time hire.

Small and Medium-Sized Enterprises (SMEs)

SMEs may not have the budget for a full-time CFO but still need professional financial management to support growth, manage risks, and optimize operations.

Fast-Growing Companies

Businesses experiencing rapid growth can benefit from the strategic planning and financial oversight a fractional CFO offers, helping them scale effectively and sustainably.

Companies Facing Financial Challenges

If a business is dealing with financial difficulties, a fractional CFO can help navigate these challenges by improving cash flow management, restructuring debt, and developing turnaround strategies.

Project-Based or Seasonal Businesses

Companies with fluctuating financial needs, such as those in construction or retail, can use a fractional CFO to manage finances during peak periods without committing to a full-time position.

Nonprofits

Nonprofit organizations often require financial expertise to manage grants, donations, and budgets effectively. A fractional CFO can provide this expertise on a part-time basis.

What does a Fractional CFO do to promote businesses?

The main responsibilities and tasks of the fractional CFO are listed below.

  • Businesses get the opportunity to work with an experienced CFO without spending a cent more. 
  • A fractional chief financial officer improves business financial management.
  • Budget projections are now easy with the Part-time CFO services.
  • They can handle your business’s legal matters and issues.
  • Easily manage your business negotiations, such as leases, insurance, etc. with your clients, CEOs, or employees.    

When do businesses need fractional CFO services?

Startups or businesses need a fractional chief financial officer when they face several challenges. Likewise, when they feel in

  • Overcoming financial challenges
  • Achieving financial targets and growth
  • Optimizing business strategies 
  • Implementing laws for employees and clients 
  • Making company policies according to the updated laws and regulations.

Businesses should consider hiring a fractional CFO, at least for their tenure. Till then, they are not getting support from crowdfunding platforms. 

Key Considerations Before Hiring a Fractional CFO

Do not assume that the financial CFO you will be hiring will only be with you temporarily.  Just ask a few questions before you give access to your business balance sheet. 

Q1. Does the financial CFO you are looking for know your business thoroughly?

Reason to ask this question, It is very important to check as a business whether the Financial CFO is well aware of your business. It will help you assess that your funds will not be mismanaged by any other.

Q2. Are the Part-time CFOs are well aware of the related laws and orders of your related business?

Reason to ask this question, Checking their legal knowledge is very crucial as this will help you to analyze whether are they perfect to manage your funds or just entangled in the legal wars. 

Q3. Check their knowledge about existing laws, regulations, and the updated ones, especially of the country from where your business serving or in the future willing to serve. 

Reason to ask this question, Every country runs on its rules, laws, and regulations. Make sure, the financial CFO you will hire for your business is well aware of the laws, rules, and regulations of the country from which you belong or in the future you are willing to be.  

Q4. Do fractional chief financial officers possess the quality to think out of the box and give solutions (in case of issues) without tempering the laws that would benefit your business? 

Reason to ask this question, When you are in the starting phase of your business, many times big companies try to suppress you. Here, you need an expert who is knowledgeable about the laws in your nation and can provide you with a hassle-free solution to resolve this problem.

Q5. Ensure to check their communication skills.

The reason to ask this question is, to check whether the financial CFO is compatible with exchanging thoughts without losing the essence of words.  

Note: You can add more questions according to your requirements.

If you get a satisfactory answer to all your queries, then congratulations! You will successfully get the best fractional CFO services for your organization

Top Fractional CFO Companies for Your Business

Choosing the right fractional CFO can be a game-changer for your business. Here are the top 7 Fractional CFO Companies to partner with for your success

1. PARO

Paro CFO

Perfect fit for companies or accounting firms that are looking for skilled finance experts. Who assists them in reinforcing, growing, and optimizing faster.

This organization brings years of experience and a data-based POV to help you visualize your big-picture strategy and gain long-term value. They give you the industry knowledge and proficiency to go from grind to grow as business strategy consultants.

Best for Businesses:

Small, Medium, and large enterprises

Services Offered: 

  • Accounting & Bookkeeping
  • Strategic Advisory
  • Financial Planning & Analysis
  • Tax & Compliance Services
  • AI Consulting Services 

Platform Type/Business Model:

Freelance

Country Based:

Chicago US

Pricing:

Starts from $45/hour

2. Invedus Outsourcing

Invedus

Whether you’re a start-up, small business, or medium business, Invedus Outsourcing Services has the perfect solution for your business finance needs. By scaling and accelerating growth, optimizing resources, overcoming challenges, and maximizing shareholder value, their forward-looking financial strategy assists companies in reaching their objectives.

Best for Businesses:

Startups, Small, and Medium Businesses

Services Offered: 

  • Bookkeeping
  • Accounting
  • Tax Preparations
  • Financial Analysis
  • Tax Preparation
  • Payroll
  • Auditing 
  • Tax Calculations
  • Outsourced HR Services
  • Fractional Controllers

Platform Type/Business Model:

Outsourcing and Offshoring

Country Based:

London UK

Pricing:

Starts at $4.5/hour

3. Preferred CFO

Preferred CFO

Preferred CFO offers companies looking to improve their financial strategy, overcome obstacles, increase profits, and speed up growth outsourced CFO & controller services. They have decades of experience in developing successful financial strategies. They have worked with companies of all sizes, in a variety of industries, and at various stages.

Best for Businesses:

Startups, and Small Businesses

Services Offered: 

  • SAAS CFO Services
  • Expert Fractional CFO Team
  • CFO Consultants
  • Outsourced HR Services
  • Fractional Controllers
  • Bookkeepers On Staff
  • Fundraising Services
  • Operational Plans & Strategy

Platform Type/Business Model:

Outsourcing 

Country Based:

Utah, US

Pricing:

Visit Website

4. Toptal

Toptal CFO

The Toptal is a hub for in-depth studies and analysis on all facets of finance, ranging from innovative strategies on raising capital to detailed coverage of new finance trends and technologies.

It has a marketplace for top finance experts in financial modeling & valuation. Additionally,it connects businesses with CFO advisors to help with a variety of financial and business challenges. 

It has an elite network of highly skilled and experienced CFO professionals that can be accessed on demand. This platform offers fractional CFO or other finance experts for your short or long term projects.  

Best for Businesses:

Startups, Small, Medium, and Large Businesses

Services Offered: 

  • Financial Modelers
  • Startup Funding Consultants
  • Cash Flow Consultants
  • Venture Capital Consultants
  • Business Plan Consultants
  • M&A Consultants
  • Fundraising Consultants
  • Pricing Consultants
  • Valuation Specialists
  • Fractional CFOs
  • Small Business Consultants
  • Pitch Deck Consultants
  • Financial Forecasting Experts

Platform Type/Business Model:

Freelancer

Country Based:

San Francisco US

Pricing:

Visit Website

5. Launch Finance

Launch Finance CFO

Launch Finance is a fast-growing premier financial services firm which supports most exciting high growth startups. 

On this fractional CFO platform, their part-time chief financial officer develops a comprehensive financial strategy to boost your business. They provided services like budget creation, risk identification, and revenue and expense forecasting.

Best for Businesses:

Startups, Small, Medium, and Large Businesses

Services Offered: 

  • Fractional CFO
  • Fundraising
  • Venture-Backed Startups
  • VC & PE Fund Administration
  • Venture Debt – Bank Lines
  • Technical Accounting
  • M&A Support
  • IPO Support

Platform Type/Business Model:

Outsourcing

Country Based:

San Francisco US

Pricing:

Visit Website

6. IgniteSPOT Accounting

If you are also one of those who does not have enough time to manage their business bookkeeping, payroll management, and other financial reporting tasks and looking for an alternative who can handle their business, then IgniteSPOT can fill this position for you. 

They assist businesses in managing accounting services at affordable prices. 

Best for Businesses:

Startups, Small, Medium, and Large Businesses

Services Offered: 

  • Online accounting services
  • Virtual bookkeeping services
  • Outsourced CFO services
  • Outsourced controller services

Platform Type/Business Model:

Outsourcing

Country Based:

Utah US

Pricing:

Visit the Website, pricing is based on different plans

7. GrowthLab FaaS

GrowthLab FaaS CFO

It is a Finance-as-a-Service (FaaS) provider. It offers its services in multiple segments of finance. 

GrowthLab specializes in assisting small and medium businesses, and startups, by providing leadership and execution with elevated financial management, business intelligence, strategic planning, and workflow automation (STRMS.io).

Its customer portfolio delivered its services in multiple industries including venture-backed startups, service-based companies, and the hospitality/restaurant industry.

Best for Businesses:

Startups, Small, and Medium Businesses

Services Offered: 

  • Bookkeeping
  • Accounting
  • CFO Strategy 
  • Financial Planning & Analysis
  • Virtual Tax Manager
  • People Advisory Services

Platform Type/Business Model:

Onsite and Outsourcing

Country Based:

Providence, US

Pricing:

Starts at $300/month

Fractional Chief Financial Officer: How Much Does It Cost?

Well, it can be difficult to give you a precise estimate of the cost of a fractional CFO. Nevertheless, they bill companies on an hourly, weekly, or monthly basis (although, in extremely rare circumstances, some companies also bill every quarter). 

However, according to numerous reports, you can start hiring a fractional CFO for as little as $4.5 per hour, or $799 per month, and work your way up to $500 per hour.

Rest the plan based on the complexity of your accounts. 

A lower price does not imply a lower standard of performance. However, we advise you to consider these options before hiring a fractional CFO for your business. Check out their ratings, and reviews, and follow the below steps.

Worth Reading: Virtual CFO vs. Traditional CFO: A Comprehensive Comparison

How to Hire a Fractional CFO For Your SME or Startup?

To hire a part-time CFO, follow the below steps.

Step 1: Determine Your Company’s Needs

Evaluate your financial management needs and set clear goals. Decide on the specific functions and duties you want the fractional CFO to perform.

Step 2: Ensure Relevant Industry Experience

Make sure the fractional CFO has experience in your business domain and understands your unique tax and financial processes. Check for additional services they offer that could benefit your business.

Step 3: Research and Shortlist Candidates

Create a list of potential candidates based on your needs and budget. Look for candidates with experience in managing challenges specific to your industry.

Step 4: Check Availability and Timeline

Ensure the fractional CFO can meet your project timelines and is available during your business hours, especially if there are time zone differences. Verify that their expertise fits within your budget.

Step 5: Interview and Finalize the Agreement

Conduct interviews to assess candidates’ personalities and fit for your company. Discuss your requirements, budget, and engagement terms. Once satisfied, sign the agreement and start your financial project.

Some Questions that you might be thinking of regarding the Fractional CFO

Q1. Is it worth hiring a fractional CFO?

A1. Well, hiring a fractional CFO is purely based on your business needs. However, investing in a part-time CFO will allow you to access their expertise without constraining your budget.

Q2. What are the benefits of hiring a fractional chief financial officer?

A2. There are multiple benefits that you can avail of when availing of financial CFO services. Likewise:

  • Budget Friendly
  • Time-Saving
  • Access Expertise without straining pocket
  • Reduces Your Burden
  • Allow you to spend more time with your friends and family.

Q3: When Should a Fractional Chief Financial Officer Be Hired?

A3. There are certain situations when your company needs a fractional CFO. Likewise:

  • When the company’s size and revenue complexity begin to overburden the existing finance team.
  • When you run out of money, your company needs experience.
  • When the business wants to raise funds from private investors.
  • when the deadline for your project is rapidly approaching. 

Q4: Are fractional CFOs and virtual CFOs the same?

A4. No, a virtual CFO works for long-term tenure for your organization. However, a fractional CFO will work for a few hours or work according to your business hours. 

Q5. How does a fractional CFO differ from an outsourced one?

A5. A fractional CFO is a part-time CFO who works based on your business requirements. An outsourced CFO is a contracted CFO who provides financial services to businesses after signing the legal formalities.

Need Help with Your Finances?

At Invedus, we understand the pivotal role a fractional CFO can play in steering your business towards financial success. Our expert fractional CFO services offer you the strategic financial leadership you need without the full-time commitment.

Partner with Invedus and gain access to top-tier financial insights, tailored strategies, and dedicated support to help your business thrive. Contact us today to learn more and take the first step toward financial excellence.

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Meet Garima, an integral member of the Invedus editorial team. With three years of experience in crafting compelling narratives, she brings a wealth of expertise to our roster. Her mastery of technical content writing ensures clear and precise communication. Discover how she can elevate your brand's story with persuasive and captivating content.