What is a Fractional CFO and When Should You Hire One?
At a certain point, it’s common for startups and small business owners to reach a point where basic bookkeeping isn't enough, but they're still not ready for a full-time Chief Financial Officer. If this sounds familiar, a Fractional CFO might be just what your business needs.
What is a Fractional CFO?
Think of a Fractional CFO as a high-level financial strategist who works with your company part-time. While your bookkeeper handles daily transactions and your controller manages accounting operations, a Fractional CFO takes a broader view. They're the strategic partner who helps make those big-picture financial decisions that drive growth.
How a Fractional CFO drives business growth
Strategic planning and analysis
Your Fractional CFO will dig deep into your financial data to spot trends and opportunities you might miss. They're like a financial detective, identifying potential issues before they become problems and turning complex data into actionable recommendations that align with your goals.
Systems and process optimization
Growing businesses need scalable systems. Your Fractional CFO can help choose the right financial software, set up proper controls, and create efficient reporting procedures that grow with your business.
Team development
A good Fractional CFO doesn't just work alone — they help your existing finance team level up their skills. This investment in your team's capabilities pays dividends long after the CFO's engagement ends.
Cash flow management
Through careful forecasting and analysis, your Fractional CFO helps ensure you have the cash you need, when you need it. They'll help optimize your working capital and improve collections so you never miss a growth opportunity due to cash flow constraints.
Expert guidance for major transactions
When it's time for big moves like mergers, acquisitions, or raising capital, your Fractional CFO becomes invaluable. They can:
Guide you through complex term sheet negotiations.
Manage the due diligence process.
Connect you with potential investors or buyers.
Communicate effectively with your board and stakeholders.
Review and structure complex contracts.
Benefits of the fractional model
Cost-effective expertise
Hiring a full-time CFO is expensive, often costing $350,000 or more annually plus benefits. A Fractional CFO gives you senior-level expertise at a fraction of that cost, charging only for the time you actually need.
Flexibility and scalability
Your business needs change throughout the year. A Fractional CFO arrangement lets you scale their involvement up or down as needed, making it perfect for growing companies or those facing temporary challenges.
Broad experience
Fractional CFOs bring experience from multiple industries and companies. They've likely solved problems similar to yours before and can bring fresh perspectives to your challenges.
Signs your business might need a Fractional CFO
You might want to consider a Fractional CFO if your business is:
Growing so fast your financial systems can't keep up.
Struggling to understand your cash flow patterns.
Needing sophisticated financial modeling and forecasting.
Preparing for a major transaction or capital raise.
Missing clear financial metrics and KPIs.
At Archer Lewis, we understand that every growing business reaches a point where basic accounting isn't enough anymore. Our Fractional CFO services help bridge that gap, providing the strategic financial leadership you need to reach your goals — without the full-time cost. Learn how we can help your business reach its full potential.