There are many organizations that could use a chief financial officer, but also do not need a CFO full-time. Rather than paying for a full-time employee or going without this much needed position, there is an option in between. A fractional CFO works for a company for a fraction of their time, usually on a part-time or project basis.
A fractional CFO could be hired using full-time equivalent (FTE) hours, or as a contractor. As an FTE the CFO would be an employee of the organization, while a contractor remains independent.
An FTE CFO often comes at a better price than a contractor. Contractors typically work for a variety of clients, and deal with their own taxes and costs. They often command a higher wage than a full-time employee. That being said, if a CFO is coming into your business as an employee you will have to pay for taxes, benefits, and associated costs.
There is no need to worry about contracts or how they will impact your business. Compared to a fractional, contracted CFO, an FTE CFO is less scalable. Changing hours or other work parameters will require negotiation.
Hiring a contracted, fractional CFO puts the burden of taxes and benefits on the contractor themselves. You may also find that you save money with a contracted CFO, as you only pay them for the hours you need. Scaling up or down is a lot easier, especially if you set minimum and maximum hours within the contract.
Overall, a contracted fractional CFO generally comes with less hassle. They are there to get the job done, with an outside view of the company which can bring about new insight and better decision making.
A financial controller is essentially the lead accountant for a business, overseeing and directing financial activities. They typically report to a CFO, but in some cases, the responsibilities of the position are combined, especially in smaller companies. While larger businesses can spread financial responsibilities around, small businesses tend to put more tasks on one person’s list.
Financial controllers play an important role, reducing the risk of fraud and ensuring regulatory compliance. They are key to keeping financial reports accurate, and ensuring the organization’s accounting process can grow along with it. They are certainly a step above a bookkeeper when a company is expanding!
However, sometimes a CFO is a better choice, or a person to hire in addition to a controller. A controller may have the financial mind for numbers but lack the ability to report and interpret on those numbers, creating long term strategy. A controller may also carry less weight with stakeholders and potential investors than a CFO.
A remote CFO handles their roles from outside of the work environment. They are often less expensive than other iterations of CFOs, but companies need the right infrastructure to bring one on board. Remote CFOs are a good fit for organizations willing to implement the technology, who do not need immediate, physical access to a CFO in-house.
Fractional CFOs are typically paid by the hour as per their contract. You can expect to pay between $175 to $300 an hour for fractional CFOs depending on your location. Most contracts do not include benefits.
A remote CFO may be like a full-time CFO, just working from elsewhere. In this scenario, benefits of some sort are typically an expectation.
ZipRecruiter shows average annual pay at $125,000 a year.