Introduction: The Changing Landscape of CFO Roles
In an ever-evolving business environment, the role of the Chief Financial Officer (CFO) is undergoing significant changes. As companies reassess their future strategies, fractional CFOs—those who work on a freelance or part-time basis—are gaining increased attention. This article is inspired by and expands upon insights from an original piece published on CFO Dive.
Why Fractional CFOs are Gaining Traction
According to Wes Bricker, Vice Chair and US Trust Solutions Leader at PwC, fractional CFOs can be particularly beneficial for emerging companies. “The concept of a fractional CFO is to have a financial leader for a portion of the time, fulfilling specific needs,” Bricker explains.
The Appeal of Fractional CFOs for Late-Career Executives
A fractional CFO role can be attractive for executives in the later stages of their careers. It allows them to leverage their expertise without the pressures of a full-time commitment, as highlighted in a recent Wall Street Journal report.
Weighing the Pros and Cons: Fractional vs Full-Time CFOs
Companies must carefully evaluate the benefits and drawbacks of having a fractional CFO as opposed to a full-time one. CFOs play a crucial role in strategic planning, ethical conduct, and financial management, making this choice pivotal for a company’s success.
The Role of CFOs in Uncertain Economic Times
In volatile economic conditions, the CFO acts as a “truth-teller,” according to Bricker. They help companies adapt quickly to market changes, making their role indispensable for navigating financial uncertainties.
The Trade-Off: Quantity vs Quality of Time
One concern with fractional CFOs is the potential compromise on quality due to their part-time nature. “The balance between time spent and quality of work is crucial,” Bricker notes.
Tailoring the CFO Role to Business Goals
The decision to transition from a fractional to a full-time CFO depends on a company’s objectives. For growth-focused companies, a fractional CFO may be a stepping stone towards a larger-scale operation. Conversely, for companies aiming for operational efficiency rather than rapid growth, a fractional CFO might be a long-term solution.
Addressing the Issue of Job Creep
The expanding responsibilities of CFOs, from technology to human resources, make the fractional CFO model even more appealing. It allows companies to focus on strategic initiatives without overburdening a full-time executive.
Making the Right Choice: Capacity Planning for Success
Companies can opt for a fractional CFO or distribute responsibilities among other executives. “The choice in capacity planning is instrumental in a company’s success,” Bricker concludes.
