Fractional CFO For Dummies

Kimberly Green | 2024-07-18

I try to book calls with the accountants on our site as much as I can because as a company being operated by 3 non-accountants, I’d say it’s pretty important to keep in touch with your customer base! I just got off a call with a new accountant on our site, Alejandro. I love Alejandro! This was supposed to be a 15-30 minute conversation, but it was just about 2 hours. Alejandro took me to school! I told him I was solo traveling this summer and it turns out he’s a pro in this area, so we ended up spending the first 15+ minutes with Alejandro telling me everything he does to be a vetted solo traveler. Some people cold email for business, Alejandro will cold DM you while he’s traveling to network and make friends. But most impactful to Sam’s List, he shared some interesting thoughts around a Fractional CFO. I’ve always looked at Fractional CFO as a buzzword, but it’s actually a cheat code. I’m gonna try my vetted to share with you what Alejandro shared with me—examples and everything. What is a Fractional CFO? Tipalti’s definition: A fractional CFO is a part-time Chief Financial Officer typically hired by startups on a contractual basis to share their expertise in finance, strategic planning, and other CFO-related activities. ( Source ) My definition: The person you hire for a specific problem(s). The Role of a Fractional CFO Turns out, a lot of founders confuse the roles of Fractional CFOs, accountants, and bookkeepers. While bookkeepers handle day-to-day transactions and accountants validate these at year-end, a Fractional CFO offers strategic advisory services that go beyond the numbers. A Fractional CFO brings flexibility and expertise to your company without the full-time cost, which is a huge benefit for most, but it’s not actually a vetted advantage. Alejandro recommends considering a Fractional CFO first because you may be looking to hire a full-time CFO because you have a problem that you want to solve right now, but that problem may be gone in 3-6 months and now you’re stuck with an expensive executive on your team. The Fractional CFO role is ideal for specific projects like capital raises or fixing systemic financial issues. For example, one of Alejandro’s clients was struggling to scale revenue despite having a good customer base. That’s everyone right? 👀 Instead of just creating a budget, he dived deeper to find out why the company wasn’t growing revenue from existing customers. By asking the right questions, he discovered that the company’s pricing...