Full-Time CFOs vs. Fractional CFOs: Whom to Hire

Running out of money is a situation that no businessman wants to deal with. This bitter truth demands the need for CFOs, as they help corporations maintain cash flows. However, the doubt many companies have is whether to go for full-time or contractual CFOs.

Money is the blood of every business; without it, no business can bear the risks and proceed with operations. Making the decision between a full-time and fractional CFO might be crucial when it comes to business finance. The decision may feel like hiring a full-time executive versus a consultant.

The article acts as a perfect guide to knowing which type of CFO works fruitfully for which business type.

Factors That Help You Make a Better Choice

1: Expertise & Knowledge

A full-time CFO only works for one business and performs daily operations and long-term strategic planning to accomplish the company’s targets. On the other hand, contractual CFOs work part-time and focus primarily on particular tasks within an organization to maintain financial statements & elevate growth. Fractional CFOs may represent several organizations that help them to have updated and vast knowledge, which helps corporations compete in the market.

2: Cost

For any startup or small company, cost is a vital consideration. They want to accomplish their goals by keeping expenses low. Full-time CFOs usually charge a higher salary because they work full-time and perform critical tasks. On the contrary, fractional CFOs are typically more economical because they are only paid for particular services.

3: Participation in the Business

Undoubtedly, full-time CFOs are well-versed in the organization’s dynamics, culture, and internal procedures. However, fractional CFOs show less involvement in the business as they are hired for temporary periods. But if one really wants their expenses to be low, then they need to make an effort to provide an insight into the company’s culture to a fractional CFO before hiring. If they align properly with the business environment, then they are a productive choice.

4:  Priority Work Areas

There is no doubt that a full-time CFO can make strong long-term financial plans as they know the company’s strategies, structures, and processes properly. They work on almost everything, but multiple tasks act as a hurdle sometimes, which impacts the completion of the project on time.

Generally, fractional CFOs are hired for specific reasons, but startups or small businesses can still hire them over full-time Chief Financial Officers. At less cost, they can work on financial restructuring, planning future obstacles, and navigating current errors that result in balanced cash flow. Moreover, they are the best choice in critical times.

Final Comparison

A full-time CFO is a perfect choice for enterprises that need long-term commitment and dedication. Larger firms with complicated financial arrangements can always look for them. Only businesses with higher revenue can successfully collaborate with them, as they charge high salaries.

A fractional CFO is the ideal option for businesses that are going through transitions or in need of specialized knowledge. Hence, a fractional CFO’s flexibility & cost-effectiveness make them the ideal choice for startups and smaller enterprises. Moreover, they provide extra strategic direction and work well in a heavy-pressure culture.

Author Bio –

Introducing Aleksey Krylov, a distinguished Chief Financial Officer (CFO) whose professional journey reads like a success story in financial leadership. With a robust background encompassing investment management and financial roles in the dynamic realms of life sciences, agricultural industries, and medical technology, Aleksey is your go-to expert for driving growth in healthcare organizations. A proud alumnus with an MBA from Columbia Business School and a Bachelor of Science degree from Babson College, Aleksey doesn’t just navigate the financial landscape; he transforms it!