INSIGHT

What is a fractional CFO?

March 18, 2025

Services: CFO Services

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Businesses of all sizes are discovering the value of flexible financial leadership through fractional CFOs. A fractional CFO provides high-level financial expertise at a fraction of the cost of a full-time CFO, making it ideal for businesses that need timely strategic guidance without the fixed overhead. They help optimize cash flow, improve profitability, and navigate complex financial challenges like M&A due diligence and integrations, corporate restructuring, and professionalizing finance and accounting functions.  

With a flexible, scalable approach, a fractional CFO strengthens financial infrastructure, enhances decision-making, and drives long-term growth without the commitment of a full-time hire. 

“It’s an unprecedented time with a new administration, a war for talent made more complicated by an evolving immigration policy, and $1 trillion+ dollars sitting on the sidelines with concerned investors. Successful companies and their leadership teams are ceasing control of their business and preparing to weather a storm of external forces. Leveraging the variable cost and immense intellectual capital offered in a Fractional CFO model will enable growth in spite of market head winds, serving as the cornerstone to successfully navigating a complex environment.” – Terry Hill, Partner – Advisory 

How a fractional CFO helps your business 

Understanding when to bring in a fractional CFO often comes down to recognizing specific challenges in your business. Here are key areas where fractional CFOs provide strategic value: 

Managing growth and transitions 

Whether you’re planning extreme organic or inorganic growth; considering a merger or acquisition; and / or preparing for sale, recapitalization, or IPO, a fractional CFO brings strategic insight to drive decision support / informed decisions. They’ll help: 

• Build scalable financial systems 
• Create financial roadmaps with forecasting and scenario planning 
• Set meaningful performance metrics and build KPIs 
• Monitor progress and adjust strategies based on results 

Cash flow and working capital optimization 

Many businesses face cash flow challenges (especially in a volatile follow-on investing climate) even when showing strong commercial performance. A fractional CFO addresses this by: 

• Creating / highlighting the path to a decreased burn rate 
• Building better working capital practices through accelerating payments and optimizing payment 
• Developing strategies for fluctuations in materials and labor / developer cost, cloud tools and infrastructure costs as well as inventory spikes 

Capital structure and fundraising 

Raising capital or liaising with current investors requires sophisticated financial guidance. Your fractional CFO will: 

• Prepare detailed financial models and projections 
• Create visibility and clarity for investors 
• Establish or deepen relationships with potential funding sources 
• Structure deals advantageously whether through enhanced valuation or better structure 
• Manage and drive the entire due diligence processes 

Systems and process improvement 

As operations become more complex, a fractional CFO can help by: 

• Assessing current system capabilities and limitations 
• Implementing new financial software & ERP / MRP environments 
• Designing efficient reporting processes for the Board and SLT / ELT 
• Creating better tracking and analysis tools 
• Integrating systems across departments 

What makes fractional CFOs different 

The fractional model stands apart from both full-time CFOs and financial consultants in several key ways: 

Flexible engagement 

Unlike full-time CFOs, fractional CFOs scale their involvement based on your needs. This means you can increase or decrease their time as your business requirements change, providing cost-effective access to high-level financial leadership. 

Strategic financial leadership 

Fractional CFOs develop comprehensive financial strategies that propel business objectives forward. Unlike consultants who typically focus on specific short-term projects, fractional CFOs provide ongoing strategic guidance and stay involved to see initiatives through to completion. 

Broad perspective 

The professional seniority, operating savvy, and deep industry experience of fractional CFOs gives them unique insights into industry trends, best practices, and common challenges. They help you “see around corners”. This breadth of experience brings fresh perspectives to your business challenges. 

Cost-effective structure 

The fractional model eliminates the fixed overhead costs – and dilution to the cap table – associated with full-time executives while still providing access to the senior-level financial guidance of a full-time hire. You get the strategic input you need without the long-term financial commitment. 

Maximizing value with BPM’s CFO Services 

Working with BPM’s CFO Services team provides unique advantages that go beyond traditional financial guidance. Our CFOs are long-term employees who bring both their individual experience and the collective knowledge of a full-service firm of 1500 employees. This means access to comprehensive support across tax, audit, and consulting practices when your business needs it. 

BPM’s CFO Services team delivers rapid, transformative impact by leveraging decades of senior leadership experience. With expertise in operational intervention, cross-functional coordination, and strategic team building, we rapidly and seamlessly integrate with your organization to uncover opportunities for sustainable growth and stability. Collaborating closely with key stakeholders, our CFO Services team creates tailored financial strategies that drive lasting, measurable change and position your business for long-term success. 

Whether navigating the next phase in your business lifecycle, M&A transactions or a fundraise / IPO, implementing new systems or governance / controls, or charting a course for international growth and new product / services launches, BPM’s CFO Services team works in close collaboration with your leadership and executive teams. We focus on understanding your unique challenges and opportunities, ensuring minimal disruption while driving meaningful business transformation. 

Our approach combines strategic financial leadership with practical, hands-on support, helping your business achieve its growth objectives while maintaining strong financial foundations. From emerging growth companies to established mid-market organizations, we provide the right level of CFO support precisely when you need it.