Surprisingly, many people get this wrong.

Let’s start out with what a Fractional CFO is not.

What a Fractional CFO is NOT

A Fractional CFO is not a bookkeeper. Yes, they will leverage the data your bookkeeper produces, and can help make that data more useful by ensuring things like the chart of accounts are set up properly. Hopefully, your bookkeeper and Fractional CFO are not from the same firm.

A Fractional CFO is not an Accounting Manager or Controller. Yes, they may oversee the bookkeeper and they may help tackle thorny accounting issues to get things right. These roles are backward-looking; however, and that is not where a Fractional CFO should be spending his time.

A Fractional CFO is not an employee of the company. Most intuitively understand this, but it’s worth clarifying – the Fractional CFO is a third-party service provider.

Now, with those common misconceptions out of the way, let’s define what a Fractional CFO actually is.

What is a Fractional CFO?

In its simplest definition, a Fractional CFO is a strategic finance professional who serves organizations on a consulting basis.

Let’s make sure we don’t miss a critical nuance in this definition: just what is meant by strategic finance?

The essence of strategic finance is the marrying of strategy and finance – duh. But what does that mean?

We generally know what is meant by finance – capital, profit and loss, cash, banking, assets, liabilities, equity, etc. Finance is a rigorous discipline. It’s based on mathematics (unlike accounting, an important distinction). In short, it’s a science.

Strategy, on the other hand, deals with planning – determining the best course of action to achieve specific goals as well as deciding what the goals should actually be in the first place. Strategy is essentially trying to predict or influence the future in some way. In short, it’s an art.

Effectively combining the art of strategy with the science of finance requires a certain, rare combination of innate ability, education, and experience. There are not many people for whom dancing between the definiteness of finance and the indefiniteness of strategy comes naturally.

Want to learn more about what a Fractional CFO can do for your business? Reach out today.