Menu
Search
Home My Blog CFO What is the Difference between a Part-Time, Fractional, and Interim CFO?

What is the Difference between a Part-Time, Fractional, and Interim CFO?

Author: Larry Chester, President

A chief financial officer (CFO) holds the highest financial position in a business. A CFO, according to NetSuite, is responsible for:

  • Tracking cash flow and financial planning
  • Analyzing the company’s financial strengths and weaknesses
  • Proposing strategic directions and solutions

There are, however, many different types of CFOs that can work with your business today; some of them being part-time CFOs, fractional CFOs, and even interim CFOs. So, what’s the difference between a part-time CFO, a fractional CFO, and an interim CFO?

Let’s discuss.

Infographic for "What is the Difference between a Part-Time, Fractional, and Interim CFO?"

Part-Time and Fractional CFOs

Despite the difference in titles, fractional and part-time CFOs are actually the same.

Fractional and part-time CFOs, hence their names, are individuals who fulfill the roles and responsibilities of traditional CFOs but aren’t full-time company employees.

For the sake of simplicity in this article, we will refer to part-time and fractional CFOs as just “fractional CFOs.”

Put in its most simple terms, a fractional CFO works part-time for a company on an ongoing basis. They are in the office on a regular basis and serve all the typical duties of a CFO.

Roles and Responsibilities

Typically, a company will hire a fractional CFO to provide the same services that large companies get from a full-time CFO, but at a lower cost.

When it comes to a fractional CFO, rather than working full time, they work just a couple of days a week or a couple of days a month.

However, fractional CFOs provide the same services that full-time CFOs do. Most commonly, fractional CFOs work to help businesses:

  • Achieve growth
  • Optimize strategy
  • Overcome financial challenges
  • Raise capital
  • Navigate an audit or transaction
  • Implement systems

In action, this might look like monthly financial reporting and analysis, creation of dashboards and selection and reporting of key performance indicators (KPIs), assistance with investor and lender relations, cash flow projections, overseeing bookkeeping and accounting, and/or ensuring regulatory filings (i.e. income tax and payroll tax filings) are completed in a correct and timely manner.

Lastly, there are some instances where a company will hire a fractional CFO to fulfill a particular need or to address a specific challenge or goal within a business.

For example, developing a cash flow forecast, completing price/cost analyses, performing due diligence on an acquisition, creating a strategic plan for the company, preparing or an exit strategy for the business owner, the list goes on.

The Benefits of Hiring a Fractional CFO

When you hire a fractional CFO, this individual works on a part-time, retainer, or contract basis. This allows your business to receive the insight and expertise of a seasoned CFO without the in-house costs of hiring a traditional, full-time CFO.

Now, let’s move on to interim CFOs.

Interim CFOs

Fractional CFOs and interim CFOs are not the same; however, people often conflate these terms to mean the same thing. An interim CFO, unlike a fractional CFO, is someone who is working full-time for a definitive period of time. For example, three months, six months, or one year—without becoming a long-term employee.

An interim CFO is full-time for a short time.

They work 40 to 50 hours a week but are temporary. Most commonly, according to Toptal, an interim CFO “fills a gap between the departure of one in-house CFO and the start of the new executive.”

When something is “interim,” it means that it only exists “for the intervening period; provisional or temporary.”

An interim CFO, however, performs all of the responsibilities that a traditional CFO performs.

A Final Word

Simply put, fractional, part-time, and interim CFOs all perform the duties of traditional CFOs. However, fractional and part-time CFOs work part-time for a company on an ongoing basis whereas interim CFOs are full-time for a short time.

So, what type of CFO does your business need? Read on to find out if you need a fractional CFO.

Share:

Related Posts

Mar 11 2024

Protecting Your Law Firm

As we’ve worked increasingly with law firms over the past few years, there are a number of commonalities that we’ve

Jan 05 2024

Preventing Financial Mismanagement In Law Firms

Every business needs to be careful about the procedures that they put in place to keep control over and protect

Categories
Archives

Get Clarity On Your
Company’s Performance

Our people are unique CFOs. They are all operationally
based financial executives.

Call Now Button