LinkedIn algorithms have flooded me with postings with the key words Fractional CFO.
I pray the professional advisors who recommend Fractional CFOs to their clients will not be fooled by those who sound like
they can talk the talk; however, have not or rarely walked the walk.
Why it Matters:
Fundamental principles to assess cost/benefit fit include:
a. Impact requires a proven track record of CFO hands-on leadership and implementation success
b. Cost-benefit impact results from asking astute questions – NOT assuming
c. Astute judgment identifies strategic financial management priorities and leads implementation
d. Cost and quality of the ‘solution’ is most relevant – not simply the cost rate for the time of services performed
e. A one-size fits all playbook with weekly service is not needed for all companies
a. “You do not need a sledgehammer to kill an ant”
f. AI cannot identify alternative risk-benefit scenarios in many if not most emerging and lower middle market cases
g. Advisory and/or implementation scope must be clearly agreed upon
Myths include:
- Perfect information is required; which demands priority costly time
- A VP of IT with an AI tool is more qualified than a proven track record CFO who knows cost effective tools
- An FPA executive never trusted as CFO is qualified based on being more strategic than a Controller with a CFO title
- A one-time small business CFO willing to accept lower rates is sufficient and preferred
- A Claude written playbook provides the primary benefits of a Fractional CFO
a. AI relies upon the quality of data input – garbage in = garbage out - Software tool expertise (ERP, FP&A, Big Data, RPA, AI, ChatGPT modeling, Agentic Forecasting) is the most
important qualification - The wrong fit person with the best tool will contribute more than the right fit CFO who identifies and optimizes
cost effective acceptable tools - The marginal/debatable/lesser qualified fit person with the best tool will contribute more than the right
exceptional fit CFO with cost effective acceptable tools
Fractional (or Interim full-time) CFO – What, Who, How
There is a broad range of WHAT “CFO services” are offered and/or recommended
There is a broad range of WHO offers “CFO services”
There is a broad range of HOW “CFO services” are structured/performed