Key Differences Between a Fractional and Full-time CFO

As businesses grow and evolve, many come to find that they need help collecting and understanding the financial information of a company to make informed decisions about next steps, product development, staffing, and more. A chief financial officer (CFO) usually holds this role and helps a company make important decisions based on solid information. As small businesses come to need better financial data, many look to hiring a CFO to help them with this piece. Some hire a full-time CFO and some hire fractional CFO support. In this blog, we’ll cover the key differences between a fractional and full-time CFO.

Fractional CFO
A fractional CFO refers to a chief financial officer who only spends a fraction of their time working for any one business. They perform the role of a CFO, but don’t do so on a full-time basis. This can be because of a limited budget or a limited need for full-time support. Fractional CFOs are also sometimes referred to as outsourced CFOs.

Full-Time CFO
While full-time and fractional CFOs have standard job duties, a full-time CFO is typically one who works for one company, exclusively full-time – as the name implies. This can mean the business is bigger and has more need for constant guidance, and a bigger budget to fund such a role.

Key Differences Between a Fractional and Full-Time CFO
Aside from the time spent working for any one company, there are a couple of other differences to consider. First of all, a fractional CFO will likely be more cost-effective, because you won’t have to pay a full-time salary, benefits, retirement, and the like. Secondly, they usually will have a broader range of experience based on multiple clients, so they can give you a deeper perspective to help you make great financial decisions. They also might be a bit more objective because they don’t spend their day-to-day with you or your company. On the flip side, full-time CFOs are in-house, so they might have a slightly better sense of the bigger picture and will lend you their full attention.

While there is not a right or wrong answer when it comes to hiring a full-time or fractional CFO, for many businesses the decision comes down to cost and need. Smaller businesses are often able to get away with fractional CFO support until the need for more one-on-one attention from a full-time CFO becomes necessary.

If your business needs more CFO support but isn’t ready to hire a full-time CFO – Tally Services is here to help! We offer fractional CFO services to help you comb through your financial data and give you what you need to make the best decisions for your business. Contact us to learn more about our fractional CFO services for Northern Colorado businesses.