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Challenges facing the Fractional CFO community

An engaged group of Fractional Chief Financial Officers (CFOs) in a collaborative meeting, with a female speaker leading the discussion at the head of an elongated conference table. The setting is a stylishly decorated room with star-patterned wallpaper, suggesting a formal yet dynamic exchange of ideas among experienced finance professionals.

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The fractional career path can be lonely. However, with so much demand in the market, the Fractional CFO role is one that many finance executives choose.

We’re building this likeminded community to create a space where CFOs can bounce ideas and challenge one another and share best-practice and outcomes.

To launch our Fractional Chief Financial Officer community, our Founder, Lisa Collins, held our first roundtable event. Here, attendees shared the challenges that they face within their roles and began to craft solutions to them.

Topics included:

  • Fractional versus interim positions
  • Investment and fundraising dynamics
  • Market dynamics and strategic adaptations
  • Technology’s impact on businesses

Keep reading for key takeaways from the morning’s conversation.


What is a Fractional CFO?


Before exploring the challenges faced by Fractional CFOs, lets define the role.

A Fractional CFO (Chief Financial Officer) offers financial expertise and strategic guidance to businesses on a part-time or contractual basis. Their role focuses on finance, planning, and growth strategies. Start-ups and SMEs tend to hire a Fractional to access their executive knowledge, without the cost of a full-time salary.


Interim vs Fractional

Becoming an Interim CFO is a much more traditional route and has been incredibly common up until recently. Now, we’re seeing an increase in demand for fractional professionals who can act as more of an advisor to the business.

“‘Fractional’ is actually a relatively young term. I don’t think the definition is clear cut. I think it’s actually evolving as we all undertake Fractional work, we all have different experiences.”

Recent events have demonstrated the need for organisations to be flexible and reactive in their strategies. This is the type of support that Fractionals can offer. While Interims are bound by the requirements of the contract (i.e. maternity leave), Fractional CFOs can be more flexible and are often engaged as a long-term strategic partner.


Making the move from Interim to Fractional

One challenge highlighted was being able to make the move from an Interim CFO to a Fractional CFO. “The balance of trying to get enough fractional work to come out of interim work can be a challenge,” says Lisa Collins.

Networking is crucial to identifying Fractional opportunities. To work with small businesses in early stages of their journeys, it’s important to develop a professional network who can help to refer you work.

One Chief Financial Officer in the room shared that they were a part of a group of Fractionals, rather than operating as a sole individual. This structure makes it easier for you to find the type of work that you want and excel at.


Investment and fundraising


With the turbulent economic climate over the last few years, Fractional roles have become more important to support with fundraising.

Everyone in the room agrees that this point has been difficult recently. One of the bigger challenges has been understanding what businesses are looking for, with many competing with unrealistic expectations of valuation.

The other challenge highlighted here is that investors buy in to the Founders and the product. The Fractional CFO can do as much as they can but ultimately, they need to buy into the overall business. It isn’t just about the Fractional CFO’s network, although this can help significantly.


How can CFOs add value?

A number of global factors have impacted the economy, and thus valuations, since the pandemic, from the Silicon Valley Bank collapse to the war in Ukraine. This has left many Founders unclear on how much their business is worth.

“You have to have economics front and centre because that is ultimately what you’re driving towards.”

In moments where it is harder to raise money, “it’s important to remember the fundamentals,” shared one of our roundtable attendees. Chief Financial Officers must add value by educating Founders and the wider business on how economic cycles work and their impact on capital.


Building trust with Founders

The success of a CFO, especially in this capacity, often depends on the relationship you have with the Founders of a business. As a result, a key skill that all Fractional CFOs must have, is the ability to communicate with and influence the board immediately.

Part of this is understanding which business to join. One CFO shared that you should “choose the people, not the business. Choosing the right Founder is the most important factor.”


Emerging technologies in finance


With the likes of artificial intelligence (AI) changing how we work, one attendee asked how the CFOs in the room view emerging technologies. Does AI provide more opportunities for growth, or should you approach the software with caution?


Automating tasks

There were a number of positives to using AI highlighted in the discussion. The key advantage clearly lies around automation of tasks.

Implementing artificial intelligence at the right time and in the right way will allow you to automate simple, time-consuming tasks. For instance, one CFO highlighted that data collection and analysis will be far easier with AI supporting you. There is even the opportunity for the tool to deliver recommendations based on the data it has collected.


What is the value proposition?

One of our attendees shared the importance of understanding the value proposition when it comes to adopting new technologies.

“AI and blockchain is simply the technology we use to deliver that value proposition.”

The likes of AI and blockchain are undeniably great pieces of technology. They allow you to scale at a lower cost, but the tools are useless on their own and need the right people behind them in order to be worth the investment. In this CFO’s opinion, the introduction of AI is simply a new technology to continue delivering.


Continuing to build our Fractional CFO community


A big thank you to all of our attendees and inaugural members of our Fractional CFO community. It was incredibly insightful for everyone to share challenges and insights into the role.

We’re continuing to build this community, to continue supporting your career growth. If you believe this community is a right fit for you, please reach out to our Founder, Lisa Collins, for more information.


For more on career development, contact Tenzing Search!

Tenzing Search is a specialist Finance and Accountancy Search business. We specialise in Senior Qualified appointments across the UK and USA, focusing on both Interim and Permanent appointments across all sectors.

For more support in growing your career, get in touch.

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