Fractional CFOs: affordable solution to accessing financial expertise

Financial leadership is vital to every organisation’s success but hiring a full-time CFO may be prohibitive for some businesses including large global organisations.

Fractional CFOs offer an affordable solution, however, bringing financial expertise to organisations on a part-time basis.

Chris Ortega is the CEO of Fresh FP&A –a company offering fractional CFO services to clients worldwide; the business helps CEO, Founders and Business owners transform and scale their finance organisation.

Speaking to The CFO, Ortega explained that while fractional CFOs tend to be hired by smaller businesses, there are benefits for larger organisations with permanent CFOs already in seat.

“Not every CFO knows everything about finance, and that’s where fractional CFOs come in,” he explains. “They complement the full-time CFO’s core competencies and handle other aspects of the finance organisation that the full-time CFO may not have the time, energy, or interest to handle.”

Ortega notes a fractional CFO can be especially valuable when the full-time CFO is focused on a major project, such as fundraising, and needs support in other areas.

Fractional CFOs bring deep expertise and specialisation in financial management and strategy to the table as they have often worked for several businesses across industries; they therefore pose a huge opportunity for companies which need strategic financial partners.

Ortega says, “if you want to move fast, move alone. If you want to move further, move together.” Collaboration is vital in the fractional CFO space, and even when working with full-time CFOs, it’s essential to understand the difference between the two,” he says.

Fractional CFOs are more than just consultants

Today’s macro environment means many organisations have become hesitant to hire full-time resources.

Layoffs and reductions in personnel are unfortunately all too common, particularly in the US, and has created gap and an opportunity for fractional CFOs.

With years of experience building and shaping finance organisations in multiple SaaS businesses, Ortega and his team bring strategic leadership and expertise at a fraction of the cost of a full-time CFO.

Their approach, Ortega says, is a “batteries included” one. “We know everything, between the good and the bad, and everything in between not only do you get the same horsepower, capacity, and strategic leadership that you would need out of a full-time role, but it’s at a fraction of the cost.”

Building relationships first

Fractional CFOs are relationship builders at their core, Ortega explains, noting their primary goal is to be a strategic partner to a business’ leadership. “It’s all about developing the relationship first,” he says, clarifying fractional CFOs would be unlikely to dive head first into a clients’ accounts without first having a number of “strategic” conversations.

Ortega says his teams’ first discussions focus on what an organisation’s pain points are and where the finance function is being held back.  They then move on to discussing strategy, how to approach cash burn, navigating uncertainty, and decision-making.

“We want to know what frustrations they are having,” Ortega says, whether that be internally or externally within the industry. “Another way to approach these conversations is to see where there are opportunities, and this all needs to happen before you get to the strategic vision and discuss tactics, metrics and milestones.”

Effective communication is the CFO’s superpower

One stark difference between traditional CFOs and fractional ones, Ortega says, is their focus on communication.

“We have to be great communicators. When you look at the advancement of technology right now, technology can do the calculations, the planning, and the analysis; they can do that much faster,” he says.

“Where we upskill is around the human element of our value, communication, collaboration, building connection, fostering a great community inside the business, and turning complexity into clear, concise conclusions.”

For fractional CFOs, building relationships is the key to success. It necessitates an understanding of a businesses’ needs and goals, and a focus on delivering value and establishing long-term connections.

In today’s economic environment, fractional CFOs bring specialised expertise, flexibility, innovation, and strategic focus to large organisations at a fraction of the cost. They can complement and enhance the capabilities of a traditional finance teams, while providing valuable support and guidance in achieving the organisation’s financial goals.

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