Emerging technologies, new responsibilities and continuing economic headwinds are all impacting the role of the CFO — as well as what companies and businesses need and want out of their finance chiefs. As businesses contemplate their future strategies and goals, “fractional” CFOs — or freelance, consultant, or otherwise part-time chief finance officers — have seen a spike in popularity and attention.

For some entities, implementing a fractional CFO could prove to be the right strategic move — for example, it could be beneficial for emerging companies as they “come into their size and scale,” said Wes Bricker, vice chair, US Trust Solutions leader at PwC.  

“They may not need everything but they do need a CFO — at least some amount of the time and that’s the concept of a fractional CFO,” Bricker said in an interview

Weighing the pros and cons

The draw of a fractional CFO position could prove popular for late career executives, enabling them to ease away from the pressures of a full-time role while still putting their expertise to use, according to a recent report by the Wall Street Journal.

Businesses, however, must consider the pros and cons of a fractional versus full-time finance chiefs and which potential choice best fits their business model. 

CFOs set the tone around the company’s financial affairs and are critical to organizations’ strategic planning efforts and in developing their integrity and ethics, Bricker said. They function similarly to air traffic controllers, managing the uncertainties and needs of the business on the ground — helping to identify blind spots for the CEO and executive team, CFO Dive previously reported.

This is especially critical in an uncertain economic environment, when companies need to be able to “pivot quickly,” Bricker said, with CFOs serving as the “truth-tellers” essential for firms to ride out choppy markets, he said.

“You need a truth-teller that gives you real-time feedback about whether you're on track,” he said.

For some, this means sticking with a full-time CFO that has sweeping knowledge and access into all of the inner corners of the business in a way that may not be possible for a fractional CFO, who by nature of the role is spending less time with the business.

“If you have a fractional portion of someone's time, do you also have less quality?” Bricker said. “The trade-off between quantity and quality is important to monitor.”

However, for other companies, a fractional CFO may be the right move — keeping in mind the needs of the business and whether the executive in question has the skill set they need should be the crucial question.

Whether or not to eventually transition away from a fractional to a full-time CFO also depends on company goals, Bricker said. For entities focused on rapid growth, for example, hiring a fractional CFO is “just a step in their journey toward growing into a much greater scale of company and full-time executive teams,” he said.

“That's a business model that's premised on growth and expansion and scale. But then, there are other business models…and their goal is to continue to operate [at] roughly the same size to perfect their operations, and to perfect a product, not necessarily to grow rapidly or significantly over time, in which case a fractional CFO may be both their current state and their anticipated future state,” Bricker said. “Each can work, but each needs to be tailored to the context of the business.”

The problem of job creep   

Bringing in a fractional or consultant CFO could also help companies tackle key strategic initiatives without burdening a full-time executive, as job creep continues to be a rising source of stress among CFOs especially.

Finance chiefs’ list of responsibilities have grown wider and wider over recent years, something that can actually be a potential draw for bringing in a fractional CFO: finance leaders have skill sets outside of traditional accounting, tasked with understanding technology implementations, governance, raising capital and human resources, and “when you add up all of those other functions, you can more easily get to a full-time schedule,” Bricker said.

However, companies can also tap those executives to hone in on those areas, and can make the choice to pick and choose where they plan on handing off those functions depending on how they want to move forward.

“Maybe they'll allocate [those responsibilities] to other executives, or land on a fractional CFO,” Bricker said. “Or maybe they'll bring it all into the CFO or an office of the CFO and have a full-time executive in that function. That choice in capacity planning helps companies then be successful.”