Fractional CFO vs Fractional Controller: What’s the Difference?

These are the main skills you should consider for your fractional CFO job description. For example, accounting software alleviates manual entry and daily tasks needed for proper accounting. Fractional CFOs research options thoroughly to pick the right software for your startup.

• At TGG, the Controller is the Client Lead and Project Manager for the client engagement to help manage both the TGG and internal (client employee) teams.
• If a company is aiming to raise capital or preparing for a sale, merger, or acquisition, an outsourced CFO can get your books in order, analyze contracts, and assist with strategic relationships.
• It is common during leveraged buyout (LBO) processes to change the companies’ management structure.
• Again, depending on the region, an average pay might be around $100 an hour.
• Your business can have all of the benefits of a CFO without hiring an in-house pro.
• At the end of the day, your fractional CFO will effectively become the financial voice of your company and (in some cases) possess the authority to make decisions.

To successfully perform the duties of a qualified CFO, this professional must exhibit a high-level understanding of all related financial pieces. So whether you’re dealing with a part-time or full-time position, the requisite standard of expertise doesn’t change. What may look a bit different, however, is the breadth of experience and angle of perspective that each one brings to the table. In contrast to the full-time CFO, a part-time CFO—also referred to as a fractional CFO—is not treated as an employee, but rather as a hired contractor.

Cost Of A Fractional CFO vs Full Time CFO

These folks are experienced finance leaders and work with a variety of industries like D2C, Manufacturing, Apparel, CPG and more. Headquartered in Providence, RI, GrowthLab offers Finance-as-a-Service of (FAAS) and is an absolute master in Unique Workflow Automation to help find integrations that work around specific workflows to help save time. Growthlab is a part of Growthlab Ventures and also runs Youtube & Podcast as helpful resources.

A company could outsource the Controller role to manage their day-to-day accounting operations, while working with an outsourced CFO to develop and execute their financial strategy. For CFO candidates, prioritize those with experience managing finances for a company of similar size and complexity to yours. Look for Controllers who are proficient in accounting software and have experience with internal controls and financial reporting. However, it’s essential to understand the difference between a CFO vs Controller and the duties each position entails. While both roles deal with financial management, their responsibilities vary drastically.

Here are a few ways that a fractional CFO can help you in your business:

This work involves reinventing the tools, processes, and vendor relationships the business uses to deliver value to an ever-growing and increasingly diverse set of customers. This is often called “bridging the chasm”, as most companies start to see declining margins and increasing headaches as they grow revenue past a certain threshold. Fractional CFOs are also helpful in optimizing or implementing more forward-facing financial visibility. While many financial professionals such as bookkeepers, accountants, and controllers are tasked with keeping past and current finances organized and well-documented, a CFO focuses on the future.

Outsourcing these roles provides flexibility, allowing businesses to scale up or down as needed. Companies eliminate the need for in-house training and development by opting to outsource these roles, saving both time and money. Outsourcing a CFO or Controller role can be extremely beneficial for businesses. In either role, it’s crucial to find someone who aligns with your company’s culture and values. Ultimately, hiring a CFO vs Controller is about finding the right candidate for your company’s specific needs.

Strategic Thinker

The work might focus on specific financial challenges or maybe create a long-term approach for optimizing the overall financial performance and value of the business. Some companies require the services of a CFO, but they don’t have the means (or need) to fill that role with a full-time employee. A Profit and Loss (P&L) Report, also called a Profit and Loss Statement, is a key financial document that details a company’s income and expenses over a specific period of time. With over 16 years of experience providing CFO consulting services to over 300 organizations, and 30 years in the financial industry, Jerry is one of the most experienced outsourced CFOs in the United States. Eventually, assuming you are able to grow your business dramatically, you may be in a position to hire a full time CFO. At that point, you’ll already have a fractional CFO to step up and fill that role.

• But, if your business cannot afford a full-time accountant yet, consider a fractional CFO.
• A financial controller is essentially the lead accountant for a business, overseeing and directing financial activities, including financial management, compliance, and accounting and record-keeping operations.
• A fractional CFO is a financial expert who can bring the right level of financial knowledge to your business.
• That’s why CFOs in this sort of situation sometimes take on additional tasks outside the usual scope of financial planning, analyses and management.
• Due to their flexibility, fractional CFOs have experience in many different verticals and industries.
• A fractional CFO is an experienced finance professional who brings extensive business management expertise to a company on a part-time or project basis.
• These stages correspond with the skills needed from talent and range from an initial bookkeeper up to the traditional CFO role.

One of the biggest challenges scaling startups face is figuring out how to manage their financials without breaking the bank. Hiring a full-time CFO is costly, but without an expert CFO’s support, founders make law firm bookkeeping decisions blind. A fractional CFO for startups provides the insight, expertise, and resources needed to keep your finances in order without needing a full-time team or a significant financial commitment.

A core principle when scaling a business correctly is to optimize your resources — in other words, figure out how to grow revenue while keeping operating costs low. This all starts with having a cohesive vision for your systems, staffing, and process. The correct staffing plan is essential and must be in place for a minimum of 12 to 18 months.

• CFOs focus on financial operations, management, and strategic planning to aid founders in decision-making.
• These responsibilities require a high level of training and focus, and trying to handle them on your own can expose your business to several risks.
• They can also help you identify your business’s most appropriate funding sources and assist with fundraising.
• Gary serves clients by offering them proactive tax advice, business advisory services and consulting work as a fractional CFO.
• As a business owner, most of your time is focused on operations, while relying on others to ensure the finances are in order.
• A fractional CFO service can handle all your finance and accounting needs, including the CFO.

The main distinctions being their time commitment and contractual relationship to the company. A fractional CFO may work with your company for years or they may simply help with a specific project. In contrast, an interim CFO may also help your company with a specific project, but more commonly, they provide full-time services while you are in between CFOs or getting ready to hire your first CFO. High-growth companies often find themselves in the position of having to decide where cash is best spent. While the Controller versus CFO debate continues, becoming a CFO requires a broader skillset than a Controller. A Controller must develop additional skills and expertise to succeed in a CFO position, such as business strategy, leadership, and financial planning.

What Can an Outsourced CFO Help Your Business With?

As you and/or the leadership team work to maintain the financial health of the company and adopt smart approaches to achieving business success, be sure to take these nuances into account. There’s simply no substitute for the concerted effort of prioritizing your business’s financial future. On the flip side, the benefit of engaging with a fractional CFO or Controller with a wider range of experience means additional perspectives from additional angles. Executive management teams can benefit from seeking strategic and key guidance from a seasoned fractional CFO.