Fractional CFO

A Fractional Chief Financial Officer (CFO) (also known as a virtual CFO or outsourced CFO) refers to a highly experienced financial executive who is involved in the work of an organization on a part-time, contractual, or subscription basis, hence giving the benefits of a CFO without necessarily paying for the executive’s full-time position. “Fractional” refers to the fact that the organization gets a fraction of this individual’s services, usually measured in hours per week or month.

Fractional CFOs are frequently utilized by young and growing companies that require the services of such high-ranking financial officials but are not ready to pay their salaries.

The Relationship Between Fractional CFO Services and Bookkeeping

Most growing businesses develop their finance operations layer by layer, and this is typically the order:

• Bookkeeping: The bottom layer. Somebody has to record everything correctly and close the books at the end of each month to make further analyses possible.
• Controller: Supervises the bookkeeping operations and deals with other complicated accounting tasks.
• Fractional CFO: Situated above both of these layers and uses the clear financial data that was prepared by the bookkeeping and controller to make forecasts, raise capital, and advise the founder or the board.

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