If your business is growing fast, you may see that the old way of managing finance isn’t cutting it. You might be asking yourself if you should hire a CFO or use a fractional CFO service. When it comes to building your finance team, the right approach is shaped by the stage and size of your business.
In this article, we’ll explore whether to hire a CFO or use a fractional CFO service. We’ll also suggest a better approach for growing businesses, an outsourced finance team that provides both strategic advice and practical support, and how this model can help you scale with clarity and confidence.
What Does a CFO Actually Do?
A Chief Financial Officer (CFO) handles high-level financial strategy and cash flow forecasting. They ensure the company is ready for investors and manage risks. The CFO also aligns financial operations with business goals. There’s no doubt it adds value. 85% of SMEs with full-time or part-time CFOs saw better planning and forecasting for their business performance. It’s a critical leadership role, but it doesn’t always require a full-time commitment.
Their role includes:
- Strategic financial planning
- Cash flow forecasting
- Risk management
- Investor readiness
- Aligning finance with company goals
What Is a Fractional CFO?
A fractional CFO gives the same strategic advice and financial oversight as a regular CFO. The difference is that they work part-time or on a retainer. Consider it like having a skilled finance leader, but without the cost of a full-time salary. Research by McKinsey shows that companies using fractional executives see a 35% boost in innovation and problem-solving skills.
What Are Some Problems with a Fractional CFO?
The common mistake we see over and over: hiring strategic help before you’ve built operational readiness. That’s like hiring a race car driver when you haven’t built the car yet.
- No data for decisions: Fractional CFOs may have the right experience. But issues with systems or processes can stop them from getting the strategic data they need.
- No finance team support: They might not have enough time to meet all the finance team’s needs. These tasks should be done by bookkeepers, accountants, and financial controllers.
- Lack of team integration: Irregular visits to the business or long gaps between meetings keep the CFO apart from the executive and operational teams. This makes it hard to grasp business needs and communicate effectively about key issues.
Even the best CFO can’t do their job well without solid systems and execution beneath them.
Why an Outsourced Finance Team Works Better for High-Growth SMEs
We’ve seen it time and again: a single fractional CFO can’t meet the needs of a growing business. Strategic input is important, but businesses also need reliable systems. They require consistent execution and actionable insights to scale well.
That’s why a stronger option is an outsourced, blended finance team made just for a business’s needs. This team includes all the finance roles you could need, from a Bookkeeper to an accountant to a CFO.
We’ve learned that high-growth companies succeed when they have:
- Cloud-based accounting and payroll systems set up correctly from the start
- Inventory
- Multi-entity consolidated reporting
- Advanced business intelligence for better decision-making
- A team that connects with internal systems, like Slack, and stays involved with regular focus sessions.
Outsourcing finance functions is no longer niche; it’s widely embraced. Deloitte’s 2022 Global Shared Services Report shows that 44% of companies outsource finance services. This makes finance one of the most commonly outsourced functions alongside IT (54%) and payroll (32%).
If you’re growing quickly, don’t rush into hiring a full-time CFO or assume a fractional CFO alone can carry the weight. Instead, consider what your business really needs:
- A clear financial strategy
- Reliable data and systems
- A team to execute and adapt as you grow
An outsourced finance team gives you all three at a lower cost and with less hassle than building your own team.
Scale with Clarity and Confidence
With the right mix of strategy, systems, and execution, you’ll have the clarity to make better decisions, the data to support them, and the flexibility to adapt as you scale. If you’re ready to put the right financial structure in place, book a call with our team to explore how we can build the best finance team for your business to navigate its challenges and achieve its growth potential.
