CFOs aren’t just for big companies anymore. The rise of the “fractional” model has allowed small and growing businesses to hire experienced executives in a part-time consulting role.
For small and midsize companies, a fractional CFO can offer expert guidance at a more affordable price than a full-time executive. For growing startups, a fractional CFO can help to institute more mature financial systems and prepare for venture capital fundraising.
The model also offers new flexibility for large companies, providing a pool of talent for interim leadership and help with expansion and reinventions.
But hiring a fractional CFO means embracing a new model of work. It comes with a big question: Are both sides ready for the relationship?
FM interviewed six people who have worked as — and with — fractional CFOs. Here’s what they said about the path to mutual success for prospective fractional CFOs and their clients.
The rise of the fractional executive model
Companies are hiring fractional executives for marketing, technology, and more. Especially since the COVID-19 pandemic, companies have become less centralised, embracing remote work and gig workforces — including for high-level executives.
“When I first started, there were a lot of conversations with potential clients, convincing them you can trust someone not on your payroll,” said Sophie Wright, ACMA, CGMA, the founder of WrightCFO. “And now it’s so normal — you can be quite a reasonably sized business and not need a full-time CFO.”
Data shows the fractional model is growing in popularity. For example, The Times in the UK reported the number of LinkedIn profiles for fractional executives had grown from 2,000 in 2022 to 110,000 in 2024.
Some fractional CFOs operate independently, while others are forming firms — like Wright’s WrightCFO — that offer access to a stable of executives.
Many fractional CFOs are drawn from successful careers in industry by the promise of more flexibility and variety.
“I find myself going for a beach walk at 4 o’clock in the afternoon, and then come back and work again,” said Heiko Berens, ACMA, CGMA, a fractional CFO who lives near the coast in South Africa. “It’s not something I would be able to do if I were sitting in an office. The downside is you’re available 24/7.”
The appeal, Wright said, is profound: Fractional CFOs “diagnose the issues, get straight to work, and implement and build things”. (See the sidebar “Advice for Fractional CFOs”.)
How clients are using fractional CFOs
A fractional CFO can offer powerful insights — especially for clients that haven’t had a finance leader.
Mark Mishler, CPA, a fractional CFO in the US state of New Jersey, gave an example from his work with a young, fast-growing company.
“I was able to show them that they were losing money with their largest customer, and they didn’t realise that,” Mishler said. “They knew their cash was flowing, they just didn’t know exactly where. I made their costs more transparent and identified their cost drivers.”
As a result, the client renegotiated its relationship with the large customer, changing its pricing and reducing costs by the customer ordering palletised quantities, among other changes.
Mishler was previously a CFO for a GE HealthCare division and publicly traded aerospace manufacturer Breeze-Eastern. He moved into the fractional world in 2014. In his work with clients, he said, clients benefit from his broad career expertise and his perspective as an outsider.
“One advantage is being able to see the big picture and decision implications outside of just finance,” he said. “The other is you’re coming in fresh without any preconceived notions and historical baggage. You’re able to analyse without bias.”
Benefits for startups and mature businesses
The fractional arrangement can benefit a range of companies. A startup may need more clearly presented financial statements in order to attract private equity and other investors. Early-stage firms may also need cash forecasting and reliable reporting models that improve financial projection credibility to investors.
“In a lot of companies that have either grown quickly or are startups, they never have invested in good data management or robust financial processes and systems,” Mishler said. “They were very successful for a long time, but then when they scaled enough, this started to impede them.”
Additionally, the ageing owners of many small- and medium-size businesses (SMEs) are preparing for retirement, requiring transition planning and guidance. Meanwhile, other SMEs are seeking process improvements and financial strategy.
“So many business owners feel overwhelmed with the finances around running their businesses,” said Arlyne Chinyanganya, ACMA, CGMA, founder of the fractional consultancy Roots to Froots in London.
Large companies also may hire fractional CFOs on an interim or project basis.
“Larger companies, they’re getting leaner, and some of that most recently has been driven by supply chains and tariffs,” Mishler said. “Companies today don’t have staff resources or expertise for important one-off projects.”
Defining the client’s goals
Before hiring a fractional CFO, clients should define their goals and the ways they might employ the consultant.
Broadly speaking, there are two categories of engagements, Mishler said:
- Operational improvements, in which the fractional CFO analyses cash flow to identify profitable and problematic products or identifies and implements process efficiencies that improve market competitiveness or reduce costs.
- Project–specific roles, such as preparing for raising capital, negotiating acquisition structure and price, or developing transparent financial reporting for a board of directors.
Vishnu Prasaad Ravichandran, an associate vice president with KayOne Consulting in Chennai, India, said that client firms often are at an “inflection point”.
“They’re either preparing to raise capital, entering new markets, or grappling with rapid growth,” he said.
Many are in “capital-hungry, high-stakes industries” like electric vehicles and climate tech, he said, or software-as-a-service businesses that need revenue precision but not necessarily a full-time CFO.
Vishnu Prasaad defines these clients as needing help across one or a combination of four areas:
- Competence: Does the finance team have the expertise and ability to support the business and its vision?
- Practices: Is the company dealing with issues like inconsistent book closures or delayed reconciliations?
- Platforms: Does the company have the technology and data to offer unified and timely financial information?
- Tools: Does the company’s leadership have access to the right dashboards, models, and forecasting tools to make use of financial information?
Clients also should decide whether the fractional CFO will work in the interim until a full-time executive is hired or if it’s expected to be a long-term arrangement.
“As a client, before you make the leap in hiring a fractional CFO, really have your expectations ready,” Chinyanganya said.
Finding the right fractional CFO
The number of fractional CFOs is growing extensively, but finding the right one is crucial. The experts interviewed for this article said clients should look for experience, communication skills, and tech-savviness.
“It’s helpful if you, in your career, have managed finance teams, so you know all the roles,” Wright said of fractional CFOs.
Sophia Chelminski-Popiel, ACMA, CGMA, a fractional CFO in England, said that fractional CFOs should have extensive experience in financial planning and analysis, including a history of working with balance sheets, cash flow, and profit-and-loss statements.
Fractional CFOs also need to have rapport with clients and have an ability to speak in everyday terms, Wright said. And they should generally show some expertise in the technology of the finance function, potentially including automation and the management of tech platforms.
Beyond those common attributes, clients also should consider their specific needs and the attributes they’ll need in an executive.
“[Clients] need to think about what [their] situation is and what kind of CFO [they] need,” Wright said. Her advice: Interview as many potential fractional CFOs as possible and take the time for genuine conversation.
“One of the most important things is you have to have rapport with them. You have to be able to fully trust them,” Wright said.
Starting the fractional CFO relationship
Any fractional arrangement should start with a frank conversation between the client and the CFO.
“We’re discussing their past, their future, what are their expectations, so we can see if we align,” Chinyanganya said.
Those early conversations may establish both business and personal goals, such as a business owner’s desire to exit the business.
“For me, every engagement starts not with the numbers, but with the people behind them [and] understanding the environment of the industry in which such companies operate,” Vishnu Prasaad said.
In that early stage, he said, he’s assessing the client’s competence, practices, platforms, and tools — asking big questions, like whether the organisation’s leaders have access to the right data to make “informed, confident” decisions.
It’s also important to define the scope of the engagement. How many hours will the fractional CFO be working? Will they be focused on strategic advice, or will they be responsible for building out a finance team and its reporting functions?
“It’s really about communications and setting boundaries,” Berens said. “The more questions [clients] ask and the more they are honest about the situation, that will, I think, avoid a lot of problems going forward.”
Together, the client and CFO should develop a scope document that specifically details what the CFO will and won’t do. That document is crucial to countering scope creep, Berens said.
In this early phase, clients also should ensure that the fractional CFO has access to the data and technology — perhaps including a company-issued computer — to do their job.
Making the most of the fractional CFO relationship
Berens and Wright both suggested laying out phases of work for the fractional CFO.
Berens breaks his engagements into “foundation”, “acceleration”, and “elevation” phases, starting with data management and compliance before progressing to budgeting, forecasting, and, ultimately, developing and mapping financial strategies.
But both sides should be cautious of committing too early to highly detailed timelines, Mishler said. The speed of a fractional CFO’s work often depends on the quality of the client’s data and systems — which may not be apparent at the outset.
“You can run into danger of establishing a timeframe too early. Then you find out the data aren’t pristine, and it takes a lot more time,” Mishler said.
Clients also should prepare their staff for working with a new leader from outside the organisation. Often, the entrance of a fractional CFO may raise concerns amongst existing staff.
For a smaller organisation, the challenge may simply be introducing the finance role and mission. In a larger business, leadership may need to reassure finance staffers that they are not being replaced by the new fractional CFO.
Throughout the relationship, Vishnu Prasaad said, both sides should ensure that the fractional CFO remains focused on delivering strategic insights rather than on statutory filings that “rightly belong with accounting and compliance teams”.
Instead, he said, the CFO should work on goals like:
- Identifying “margin leaks” (unexpected or unnoticed losses).
- Figuring out whether the business can afford to hire staff or otherwise expand.
- Maximising the company’s cash runway.
- Finding the story in the numbers.
Communication and change management
Success with a fractional CFO requires open communication and a willingness to listen — and that goes for both sides.
“Always build in month[ly] or quarterly [meetings],” said Chinyanganya. “If there are any issues, they can be ironed out.”
But accepting and acting on that advice isn’t always easy for clients. Fractional CFOs may offer challenging insights about shortcomings in a client’s business model or the need to spend on finance system upgrades that don’t bring immediate revenue.
Clients should strive to be receptive and to help translate the fractional CFO’s strategic advice into changes within the company — which can’t be done without the knowledge and savvy of internal leaders.
“The good news is your fractional CFO is unbiased. They can look at business more purely. The bad news is they don’t know [what the controversial topics] are,” Mishler said. “The client’s predispositions can end up creating roadblocks.”
The fractional CFO must be ready to demonstrate their value, too, and build relationships with staff.
“You have to roll your sleeves up,” Chelminski-Popiel said of fractional CFOs. “Show that you’re helping and you do know your stuff and you actually add some value. As long as you can build that integrity and trust, the [barriers] will break down and the doors will open.”
Making the most of a fractional CFO also requires a change management process, Mishler said. That includes creating and communicating a clear vision; building engagement and buy-in; and facilitating change with knowledge transfer, training, tools, and positive reinforcement.
“It’s preparing companies and their workers for positive change,” Mishler said.
Advice for fractional CFOs
Ready to offer your services as a fractional CFO? Here’s advice from experts with experience.
- Build your experience. Delivering real value requires deep experience in leadership roles and finance know-how. “I’ve seen people with less than ten years in finance [move to fractional work], and they’re doing OK, but they’re selling fractional controller services. There’s a big market for that, but it’s not a CFO,” said Sophie Wright, ACMA, CGMA.
- Be prepared for change. Fractional CFO work differs fundamentally from working as an internal executive, said Arlyne Chinyanganya, ACMA, CGMA. “It’s harder than you expect,” she explained. In a company setting, leadership understands finance’s role, “but now you have to educate these small business owners and convince them of cost-saving initiatives as well.”
- Show your value. This new environment requires proving your value to clients. Share your success stories. “Once you show them what’s possible — how much they can save, how much they can make — then they quickly see [your value],” Chinyanganya said.
- Stay organised. Fractional CFOs must frequently juggle multiple clients, data platforms, and business situations. Chinyanganya suggested solutions including journals to track work and using templates and automation to standardise work to the extent possible.
- Don’t stop marketing. “Never stop marketing, ever,” Wright said. Otherwise, the expiration of one contract might leave a months-long void. Wright relies heavily on social media, including LinkedIn, Facebook, and Instagram, and an email newsletter. Staying active on those platforms keeps her present in clients’ minds, generating regular business.
- Be ready for AI. Business owners aren’t just turning to fractional CFOs for advice. They’re also asking AI models like ChatGPT. If the fractional CFO’s advice mirrors the AI’s, the client might suspect the CFO is using AI. If the AI and the CFO diverge, the client might question the CFO. “It’s almost starting to create a bit of friction that obviously slows down everything,” said Heiko Berens, ACMA, CGMA. It’s another reason that fractional CFOs need extensive experience — giving them the authority and emotional intelligence to hold their own in a changing world.
Andrew Kenney is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.
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