Business Coachingbusiness growthProcess Improvementsmall-businessWhat Is a Fractional CFO? Small Business Guide

January 17, 2023by nicoleevansmcda0

What is a Fractional CFO?

A specialist in finance who works as needed to assist your company in achieving its objectives is known as a fractional CFO.

They offer the same caliber of knowledge you’d anticipate from a full-time CFO at a fraction of the price and time commitment.

The majority of fractional CFOs have industry experience and can work remotely or on-site, depending on the requirements of the business.

They can fill the gap between what an executive team with expertise can offer and what a small organization can do owing to staffing or experience constraints.

They may also provide advice on how to do the following: 

  • Reduce costs.
  • Maximize resources.
  • Increase efficiencies.
  • Streamline operations.
  • Develop strategies for growth.
  • Identify potential risks and solutions to problems.

A fractional CFO will also have access to successful companies’ best practices, which can be used at the client’s firm.

Businesses can make better decisions when they have access to higher-level strategic thinking that is only possible from more seasoned employees.

What does a fractional CFO do?

The same services as those of a full-time CFO are offered by a fractional CFO.

However, their main duty is to assist firms in tracking and managing their money by offering financial knowledge, plans, and suggestions for enhancement.

They oversee financial processes such as:

  • Projections
  • Monthly Finances
  • Financial Strategy
  • Raising Capital
  • Navigating Audits
  • Scaling Systems

Fractional CFOs make predictions about the future of a company based on historical data.

This includes the following:

  • Revenue
  • Expenses
  • Forecasting cash flow
  • Financial metrics that help businesses plan ahead.
2. Monthly Expenses

A fractional CFO will examine the monthly and quarterly financial reports to determine the present financial health of the company.

They will then offer suggestions on how to make adjustments to boost the bottom line.

3. Financial Strategy

When it comes to creating a future financial strategy, fractional CFOs are a tremendous resource.

They will often analyze data and make recommendations on how to:

  • Increase revenue.
  • Reduce costs.
  • Improve profitability.
4. Raising Capital

Fractional CFOs can assist companies in obtaining funding. This could entail locating funding sources, such as loans or equity investments, and giving counsel on deal structuring.

5. Navigating Audits

When it comes to getting ready for audits, a fractional CFO will offer assistance.

They will assist in making sure that the required paperwork is organized and prepared for auditing.

This could include helping with the following:

  • Preparation of financial statements
  • Cash flow projections
  • Budgeting
6. Scaling Systems

Businesses can scale their financial systems with the aid of fractional CFOs to get ready for expansion.

They work with clients to develop strategies for:

  • Automation
  • Budgeting
  • Cost-reduction initiatives

Advantages of Hiring a Fractional CFO

Businesses that can’t afford to hire a full-time CFO might consider using fractional CFOs.

The advantages of hiring a CFO include the following:

  • Fractional CFOs Save You Time
  • Overhead Savings
  • “On Call” Financial Experience
  • Experience Raising Capital
1. Fractional CFOs Save You Time

For companies that require financial assistance but don’t have a huge budget, hiring a fractional CFO is the ideal answer.

Without the high overhead expenditures of a full-time workforce, they can offer an expert financial viewpoint and analysis.

Businesses can get the same knowledge while saving time and money.

2. Overhead Savings

The overhead expenses for salary and benefits that a full-time executive team would have are not there with fractional CFOs.

They are therefore an affordable choice for small firms seeking to strengthen their financial position.

3. “On Call” Financial Experience

Businesses can get the professional guidance they need to make wise decisions without adding more workers by having a fractional CFO on call.

To seek counsel, businesses are not required to attend board meetings or other formal gatherings.

4. Experience Raising Capital

Additionally, fractional CFOs can assist companies in obtaining funding, whether it be from a loan, an angel investor, or venture capital.

They possess the skills and expertise required to draft agreements and negotiate conditions in a way that will enhance the possibilities of success for organizations.

Why Hire a Fractional CFO?

Employing a fractional CFO can give companies the resources and knowledge they need to expand and be successful.

They are the ideal option for organizations that require assistance with their finances because they are adaptable and accessible when needed.

Here are some specific reasons businesses should consider hiring a fractional CFO: 

  • Your business is growing.
  • Delegate and elevate (As the CEO)
  • You want a better accounting system.
  • You’re thinking of raising money.
  • You’re being audited.
  • Forecasting is becoming difficult.
1. Your Business is Growing

A company’s finances may become more complicated and challenging to handle as it expands.

Businesses can make smarter judgments and manage their finances more effectively by having an expert CFO available when needed.

This might assist you in expanding operations and managing business expansion more skillfully.

2. Delegate and Elevate (As the CEO)

Being on top of all the financial responsibilities as a business owner can be challenging.

You can distribute work and make more time for yourself with the aid of a part-time CFO.

This enables your CFO to manage financial choices and plans while you concentrate on other areas of the business.

3. You Want a Better Accounting System

A fractional CFO can assist you in making improvements and streamlining procedures if your existing accounting system is overwhelming you.

They can assist you upgrade your accounting processes and increase efficiency because they have the experience and knowledge needed.

4. You’re Thinking of Raising Money

Operating a business requires raising funds on a regular basis.

Finding the best sources of finance, negotiating conditions, and structuring deals are all things that a part-time CFO can assist you with.

It can be difficult to secure capital for your company, so having the appropriate CFO on your side can make all the difference.

5. You’re Being Audited

If you’re being audited or need to provide financial documents for other reasons, having an experienced CFO is important.

A fractional CFO can help you do the following:

  • Prepare financial documents.
  • Interpret the results of an audit.
  • Respond to any questions or concerns raised by auditors.
6. Forecasting is Becoming Difficult

Making smarter judgments and making plans for the future can be aided by having access to the correct financial data and insights.

A part-time CFO can help you develop more precise company forecasts and can offer essential insight into market trends in your sector.


Businesses can gain priceless knowledge and experience about their financial operations by working with a fractional CFO.

They are a great alternative for companies that require assistance with financial choices but lack the funds or resources for a full-time CFO.

Consider employing a part-time CFO right away if you need assistance managing your finances.

Do you have any questions? Tell us in the comment section below or call MCDA CCG, Inc today!

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