A fractional CFO is an experienced financial officer who offers his services to businesses part-time or with a contractual agreement. Some businesses can afford to hire a CFO on a full-time basis, but for some, a part-time CFO who comes in when they need financial services is what they can afford.
And in some cases, you need a fractional CFO to handle the financial areas that your in-house CFO lacks expertise in.
So, whether you are a small business or a large one, having a fractional CFO can turn your business around. However, businesses sometimes hesitate to try something new, especially when they consider the financial implications.
Therefore, if you are running a business, it is not out of place that you have questions about fractional CFOs or are hesitant to hire one. Your pushback is expected even though it is unnecessary. But, to abate your fears, we will address some of the common objections we encounter in this post.
One very common objection is that fractional CFOs are not as experienced as full-time CFOs because business owners believe the former haven’t worked in situations that could spur their growth.
So, basically, they are saying that fractional CFOs haven’t had the opportunity to work in a team of professionals that could give them better insight and experience as a CFO because they are mainly working solo.
But the point is that you get as much experience working for a particular business as you do for other businesses. This is because whether you work independently or full-time, you still have to collaborate with others. And at Fresh FP&A, we are a team of financial experts, and that indicates we do indeed work with others.
Plus, the number of clients we have worked with proves our experience. But besides that, we dare say that fractional CFOs probably have a broader experience working with different types of businesses than a full-time CFO that basically works for one company.
The commitment level is also a common pushback that we often hear from clients. Usually, the first thing we do is ask for your definition of commitment. Do you mean frequency of touchpoints where you have to speak to the CFO daily or just a commitment to leading your finance where it needs to be?
Of course, this depends on the stage of your business growth. If you are in the fundraising stage, then yes, the touchpoint needs to be more frequent. But if you are relatively stable, you don’t need to speak to the CFO daily. You only need him to be committed to offering his services.
Also, at Fresh FP&A, we don’t work as the usual consultant that offers their services for a period and never to be heard from again. Now, we are building relationships with our clients. We acknowledge them as our strategic partners and relate with them as one. Because for us, part of the reason we do this is the fulfillment we get from witnessing the growth of a business we worked with.
This is the slam dunk objection, and it is probably a fair objection. We all consider finances when we want to start any venture. However, the problem is that businesses don’t consider all the factors in the equation.
Besides the salary of a CFO - which is on the high side - there are other financial commitments you would have to make to hire a good one. This includes the hiring cost, benefits, training cost and other costs that could come up.
Now, compare that with the cost of hiring a fractional CFO. wet is a fraction of the money, time, effort and resources you put into hiring a full-time CFO, and you get the same level of experience, skills and knowledge.
Does your team handle every aspect of finance, though? The reason we ask this is that there is practically no financial professional that handles every aspect of finance. 99% of the time, every professional has specializations.
So, although you already have a finance professional in place, you can get a complimentary service with a fractional CFO. For instance, your in-house CFO might be more focused on the fundraising aspect, and you can bring in a fractional CFO to handle forecasting, budgeting, or strategic planning, among others.
And if you are wondering how to merge the two teams, understand that the in-house team would manage major decisions while the fractional team would mainly serve in a supplementary capacity to pick up the slack that the in-house team doesn’t want to handle or doesn’t have the skills to handle.
The main goal of a fractional CFO is to help businesses handle the financial side of their business process. And this will give them more time to focus on the other aspects of their business.
Since fractional CFOs are working part-time, they don’t need as much supervision as a full-time team. A stand-up meeting twice a week is usually sufficient in most cases, and then you can go about your business.
So, not having time is a good objection. It is more reason you should consider getting someone with the expertise and experience to handle your finances.
And that’s it; 5 common objections for fractional CFOs. Of course, this list is not exhaustive, as we are sure there are more, but these are the ones we commonly come across. So, let us know other objections you have in the comment section.
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