Fractional CFO is a term dedicated to part-time financial experts for hire. They bring high-level insights to a business without the full-time cost. As fluctuating economies and customer demands add complexity to the business landscape, the need for strategic financial leadership grows.
But hiring such a leader and visionary is just the beginning. To truly reap the benefits, you need to know how to work efficiently with them. Let’s discuss how to make the most of your partnership with a fractional CFO.
Understand Their Strategic Role
A fractional CFO isn’t just a glorified bookkeeper or accountant. They’re a strategic partner who helps pilot your business toward financial health and growth. For example, their key responsibilities include:
- Financial forecasting and modelling
- Cash flow management
- Budgeting and strategic planning
- Risk management and compliance
- Fundraising and investor relations
Knowing what they do and having a clear scope for the role helps you delegate effectively and with a realistic expectation.
Define Clear Objectives
Before your Fractional CFO dives into the numbers, define what success looks like. Ask yourself:
- Are you trying to improve profitability?
- Is cash flow a constant headache?
- Do you need help preparing for growth?
Share your goals upfront so your new champion can tailor their approach and strategy accordingly.
Get Your Financial House in Order
Efficiency starts with access and good data. A fractional CFO can’t work magic if your financial records are a mess. So, make sure you’re on top of:
- Up-to-date bookkeeping
- Clean financial statements
- Access to accounting software
- Clear documentation of revenue, expenses, liabilities and asset registers
Consider bringing in a bookkeeper to tidy things up before the CFO steps in.
Communicate Regularly and Strategically
Fractional CFOs often work remotely or on a limited schedule, so your interaction needs to be intentional and well-timed. Here are some best practices:
- Schedule recurring check-ins (weekly or biweekly). This may be more often in the start-up and onboarding phase.
- Use shared dashboards and project management tools
- Keep emails focused and actionable
- Assign a point person internally for co-ordination
The goal is to keep them informed without overwhelming them.
Collaboration Tools to Interact with your Fractional CFO
Having the right tools at your disposal will superimpose the quality of your interactions. Working in different locations, you want to encourage both connectivity with your Fractional CFO but also transparency. Here are some areas you want to support with:
- Communications: here you want a platform that facilitates quick exchanges on the fly. An online tool with notification settings will incite a quicker response than an email.
- Training and sharing of knowledge: This is where you want some screenshare ability to display information and allow for quick visual pointers.
- Task management: managing regular tasks and larger projects gives visibility across the workload and an easy way to add and manage new assignments.
- Business insights: visibility of data is important for making the right decisions. Sharable dashboards are a great way to display financial snapshots but choose the right tool.
Using cloud-based tools will help with management of permissions and live updates.
Empower Strategic Decision-Making
Your Fractional CFO is not just here to crunch numbers but to guide business strategy. Give them the authority to make recommendations and challenge assumptions. Here are a few ways to empower them:
- Include them in leadership meetings
- Share business plans and KPIs
- Be open to tough conversations about financial risks
Their value lies in their ability to see the big picture and offer unbiased advice. Their outside perspective can uncover blind spots.
Leverage Their Network and Expertise
You will find that most Fractional CFOs have worked across industries and have an extended pool of contacts. Why not tap into their strengths? For example:
- They can help with referrals to lenders, investors or auditors
- Over the years, they have been exposed to many systems and tools – their advice in this area will be invaluable
- Having worked with similar businesses in the past, they will share their experience
Look at it this way: You’re not just hiring a person—you’re gaining access to a wealth of knowledge.
Measure the Impact
To ensure you are getting value and to enable improvement, make sure to track progress. Find a way to measure the impact of this role. Here is how to evaluate their performance:
- Set Financial KPIs before and after engagement
- Check that you are achieving your strategic milestones
- Get team feedback on their collaboration
- Track their direct involvement
Adjust the scope if something’s not working. Review the cadence of work or the tools used. One of the biggest advantages of this fractional arrangement is flexibility. So use it to your benefit.
Final Thoughts on Fractional CFOs
Incorporating the role of a Fractional CFO can be transformative for your business. Treat them as a strategic partner, not just a financial technician. With clear goals, organised data, and intentional communication, you’ll release visions and insights that enhance better decision-making and put you on the path of growth.
Hiring a Fractional CFO could be the missing piece in your business puzzle.