Today’s CFOs are ‘chief future officers’. They develop the systems that will determine a company’s future success. Gone are the days when CFOs were hired solely to balance the books and crunch numbers into spreadsheets. The role of CFO has evolved to take on operational and strategic responsibilities as the CEO’s second-in-command.

It’s why fractional CFOs are a growing niche within London companies and start-ups. Not every organisation can afford a full-time c-suite position. They may not have enough turnover or projects to justify a full-time role. Financial recruitment agencies, like FD Capital, are seeing sustained growth in demand for fractional CFOs.

London-based companies can benefit from the skills and experience of a CFO at almost every stage of their development. Whether your company is planning to scale, undergoing rapid growth, or going through a merger, a fractional CFO is vital to your success.

A fractional CFO acts as an unbiased advisor for the board and CEO, providing financial forecasting, strategy, and analysing. We’re exploring how fractional CFOs are becoming London’s most in-demand financial executive role.

What is a Fractional CFO?

A fractional CFO is a c-suite professional who works as a financial executive for a company on a contractual basis. You’ll often CFOs working on a fractional basis in start-ups and smaller companies in their growth stage. A fractional CFO works on a part-time basis with many specialising in a specific industry or focus, such as mergers or fundraising.

Most CFOs are brought on board with a specific task in mind or to trial the position with the view of becoming full-time employees as the company grows. Fractional CFOs commonly work with a portfolio of clients, particularly start-ups.

It’s not uncommon for a fractional CFO to work with multiple start-ups at once. Many have a portfolio of candidates throughout a specific industry or with a particular focus, such as fundraising.

How Fractional CFOs are ‘Chief Future Officers’

Ask a fractional CFO what their job title is and many of them will tell you they’re a ‘Chief Future Officer’. The evolution of the CFO role has moved beyond forecasting and analysis to engaging with virtually every aspect of the business. CFOs are increasingly becoming the number 2 within organisations with many being primed to one day become CEO.

Hiring a CFO on a fractional basis allows smaller companies to take advantage of their experience and skills. A CFO’s data-driven insights enable them to help companies plan for the future, including uncertain economic times and rising supply chain costs.

Although fractional CFOs work on a part-time basis, their work is vital to the company’s success. Their insights and data ground the decision-making process, while they can put systems in place to prepare the company for market volatility or growth.

Fractional CFOs have a strategic and operational role in London companies. They oversee technological investments, carry out audits, put financial systems in place, and engage with stakeholder relations.

The Benefits of Hiring a Fractional CFO

Why should a London company choose to hire a fractional CFO? The changing nature of the position means that companies can adapt the CFO role to exactly what their organisation needs. Whether it’s a start-up or a scaling company, organisations of every size can benefit from hiring a fractional CFO.

The upcoming recession makes it more vital than ever for companies to have the support of a CFO to guide them through the uncertainty. Here are some of the most quoted benefits of hiring a part-time CFO.

  • Cost Effective

The current economic uncertainty means that companies are tightly controlling their overheads, especially scaling companies. Hiring a part-time CFO is a more cost-effective solution for London companies than hiring a senior financial executive on a full-time salary.

The company gets the same access to knowledge, experience, and advice without the financial burden of a full-time CFO role. The company can later choose to promote their CFO to a full-time position when there’s the capital and demand to do so.

  • Strategic Insights

The strategic insight that a CFO provides a company is invaluable. Their data-driven forecasting and financial analysis provide a factual basis for the decision-making process of a CEO. It’s a CFO who will determine whether a strategy is financially viable and suggest ways to increase profits and reduce costs.

Developing a strategy without a CFO is like working in the dark or only having half the picture. Fractional CFOs are becoming a growing niche in London as they’re helping companies realise their potential through forecasting, strategy, and technological investments.

  • No Long-Term Commitment

Why are London companies hiring CFOs on a part-time basis? It provides the flexibility to change your mind – without disrupting the company. There are various stages in a company’s growth cycle where hiring a CFO can be beneficial, but not every company is ready to take the plunge.

Hiring a fractional CFO allows London companies to trial the position and determine whether there’s enough work to warrant a full-time position before making a long-term commitment.

  • Fundraising

It’s not uncommon to find London companies with a fundraising skills gap, especially if the CEO has no previous experience. A fractional CFO can be hired with the specific purpose of overseeing fundraising. Many specialise in dealing with private equity houses, investors, and even public grants.

Investors are more likely to consider a company for financing when they have a CFO in place to provide them with an unbiased analysis of the company’s position. A CFO will collaborate with the CEO to develop a fundraising strategy and engage with potential investors.

  • Fill the Skills Gap

CFOs are often one of the first c-suite appointments made within London companies once they start to scale.

Recruitment agencies can connect companies with candidates who can fill their skills gap, from engaging with board members to conducting an internal audit. Whether it’s cash flow or fundraising, a fractional CFO is one of the most skilled members of your team.

How to Recruit a Fractional CFO

More CFOs are choosing to operate on a part-time basis, allowing them to work remotely and with multiple clients. FD Capital is a specialist recruitment agency that connects London companies with fractional CFOs. Start your recruitment journey today by contacting FD Capital at recruitment@fdcapital.co.uk.