Fractional CFO vs Full-Time CFO: Which One is Right for You?

Fractional CFO vs Full-Time CFO: Which One is Right for You?

Adding strategic financial insight to your team should be a game changer. If its not, you have the wrong one and need to make a change. Thirty years ago our CEO recognized the value that small and medium sized businesses (SMBs) would gain from having the experience and insights from a CFO on their team. The problem they encounter with this is SMBs often do not have the budget for a full time senior financial executive. Some address this by hiring a less experienced candidate and giving them the title. That is a mistake. Some expect their controller to be their CFO. That is also a mistake. Some controllers progress to CFO but most do not.; Very good controllers do not automatically make good CFOs. vcfo is the pioneer in the space of fractional CFOs and was formed to meet this need for SMBs.

In this guide, we compare full time and fractional roles and look at why many small to mid-sized companies are moving toward fractional CFO solutions.

What is a Fractional CFO?

A fractional CFO provides experienced financial leadership on a less than full time basis. These are senior executives— CFOs with years of industry experience—who step in when your business needs high-level support but doesn’t require (or can’t yet afford) a full-time hire.

vcfo pioneered this model nearly 30 years ago. Today, businesses rely on vcfo fractional CFOs for a wide variety of support. Common areas include;

• Strategic financial partnership to the CEO and Board

• Capital Structure and Funding optimization

• Operational and cash flow forecasting

• M&A preparation and deal support

• Turnaround planning and restructuring

• System selection, implementations and audit readiness

• Board-level reporting and investor relations

vcfo is a firm of professionals. Clients gain access to a full bench of experts across finance, HR, and operations.

What is a Full-Time CFO?

A full-time CFO is a company executive responsible for ongoing financial oversight, strategic planning, and cross-departmental leadership. This is typically a full time W2 hire with a compensation structure consisting of  base salary, benefits, and often equity or bonus structures.

The full-time CFO model fits:

• Large enterprises with complex financial operations and regularly recurring needs for senior level oversight.

• Regulated industries with continuous critical compliance needs

• Public companies or firms preparing to go public as the public markets require much more reporting.

Organizations like the above generally need someone with their boots on the ground every day. However, for most private companies between $10M–$100M in revenue, that level of commitment isn’t always necessary or efficient.

The Case for Fractional: Strategic Fit Without Full-Time Cost

Most vcfo clients don’t start with a full-time CFO and they don’t need to. They need boith a strategic financial partner and assistance to stabilize, streamline, optimize and scale their finance function in a way that can grow with the company.

The Real Cost of Hiring a Full-Time CFO

Full-time CFOs are expensive and not just because of salary.

Add benefits, bonuses, health insurance, payroll taxes, 401(k) contributions, and sometimes equity grants. You’re looking at a total compensation package that easily runs between $300,000 and $700,000 annually.

Then layer on the cost of a recruiter, onboarding, systems support, and the months it takes to hire the right fit and get them fully integrated for a more complete assessment of cost.

Fractional CFOs come in at a slice of that cost, often saving companies 30% to 70% compared to a full-time hire, especially during periods of transition, growth, or turnaround.

When you work with vcfo, you’re not betting everything on one person. You’re gaining the experience of a firm that’s supported more than 6,000 companies since 1996.

When a Fractional CFO is the Better Choice

You might not need a full-time CFO—yet. However, that does not mean you can afford to wait on financial leadership.

A fractional CFO is often the right call when:

• You are unable to get an accurate timely picture of your operations

• You lack data to make key informed decisions

• You don’t have enough visibility into your cash position

• You’re preparing for a capital raise, exit, or acquisition

• You don’t have a functional budget or forecast

• You’re growing fast and your current systems aren’t keeping up

• You’re entering new markets, product lines, or funding stages without the analysis you need to make the best decisions.

• Generally you know you are not getting what you need from your current accounting team.

If you're spending too much time worrying about your finances or making decisions without the data to back them up, it's time to bring someone in.

Fractional support lets you do that without committing to a full-time hire too early.

Is a Full-Time CFO Ever the Right Call?

Often it is the right call -  but usually not until:

• You’re consistently operating above at least $50m in revenue

• Your board requires a full-time financial executive

• Your financial complexity demands daily oversight

• You’ve maxed out the ROI of a fractional model

If you’re not there yet, going full-time could cost you flexibility and strain your budget unnecessarily.

A better strategy for most businesses? Start with a fractional engagement. Scale when it makes sense. vcfo will help you recognize when that time comes and in many cases, help recruit the full-time CFO who takes over next.

What Makes vcfo Different?

There are plenty of solo CFO consultants or staffing firms offering “fractional” support. Even CPA firms are now calling themselves CFO consultants. Its very important to understand the difference. Many CFOs are CPAs. CPAs in public practice are not CFOs just because they are a CPA. Here’s what sets vcfo apart:

• Proven Experience: Our team averages 25+ years of financial and operational leadership. That means sitting in the CFO seat in industry, partnered with the CEO and C Suite and leading companies. That does not mean calling ourselves a CFO without the experience to back it up.

• Built for Scale: We support clients throughout their life cycle from start up through scaling to ultimately exiting.; We tap other professionals from our team for HR expertise, systems support and Controller level activities when needed.

• Quality Control: Every engagement is backed by a formalized client reporting structure, manager oversight, regular client updates and strategic check ins.

• Long-Term Value: Our model is designed not just to stabilize a business, but to optimize it. We believe all clients should be focused on optimal valuation throughout their life cycle, ready at any time for unexpected transactions and opportunities as well as normal activities of scaling. 

Clients don’t stay with vcfo for months. They stay for years and often return across multiple ventures.

So, Which CFO Model Is Right for You?

Ask yourself:

• Do I need daily senior financial leadership, or periodic strategic guidance on key issues and a right sized level of oversight?

• Can I afford a full time hire or is fractional support a way to meet the current needs in a more cost effective way?

• Is my current finance team positioned to support my growth plans, or struggling to keep up?

• What is the cost of not making a decision to engage financial leadership today? 

If you aren’t sure you need a full time CFO yet, start with a fractional and gain some immediate affordable relief.

Ready to Make the best CFO Decision?

Call the team that meets you where you are and builds a plan alongside you to take you where you want to go. Talk to a Fractional CFO today.