A fractional CFO can be an invaluable asset for a growing company. As opposed to a full-time CFO, a fractional CFO provides financial expertise and guidance on a part-time, as-needed basis. This allows small and mid-sized businesses to get C-level financial strategy and oversight without the cost and commitment of hiring a full-time resource. 

The key benefits of working with a fractional CFO include:

– Cost-Effectiveness – Only pay for the time you actually need them, which is often substantial cost savings over a full-time hire. Especially helpful for companies with fluctuating or seasonal financial needs.

– On-Demand Experience – Get access to high-level financial experience and expertise without needing a full-time team member. Fractional CFOs have often served as full-time CFOs for major corporations. 

– Objective Insights – Since they are not full-time employees, fractional CFOs can provide unbiased and objective financial analysis and guidance focused solely on the company’s best interests.

– Flexible Time Commitment – Scale time up or down as your business needs change instead of being stuck with a full-time salary and overhead.

– Expanded Skillsets – Fractional CFOs often have experience spanning multiple areas of finance and accounting compared to a solitary full-time hire.

However, not all fractional CFOs are created equal. Finding the right fit for your company’s specific needs and culture is critical for creating value. Asking the right questions during the evaluation and hiring process will help ensure you choose a fractional CFO that will have a truly positive financial impact.

In this comprehensive guide, we outline the 15 most important questions to ask when interviewing and vetting fractional CFO candidates. Getting detailed, thoughtful responses to these questions will provide the insights you need to make a hiring decision that sets your company up for current and future financial success.

1. What experience do you have working specifically as a fractional CFO?

Look for someone with extensive hands-on experience serving as a fractional/interim/part-time CFO for multiple companies. This demonstrates they have real experience successfully managing the unique demands and relationship structures inherent in fractional work. Simply being a full-time CFO does not necessarily translate to having the right skills and approach for fractional, on-demand engagements.

2. What types and sizes of companies have you worked with as a fractional CFO?

Make sure the fractional CFO has direct experience in your specific industry and has worked with companies around your company’s size. This indicates they will understand the competitive landscape, operational realities, regulations, financial benchmarks, and growth stages specific to businesses like yours. Avoid candidates who have only worked with much larger enterprises or other industries.

3. Can you share examples of the types of deliverables and value you have provided clients as a fractional CFO?

Look for concrete examples of ways they drove financial management, reporting, analysis, insights, strategy, and decision making for past clients. Having tangible examples of their work product and impact will give you confidence they can replicate their success for your organization.

4. What strategic financial initiatives have you led or implemented as a fractional CFO?

Understand their track record spearheading important strategic and operational financial initiatives like raising capital, M&A activity, expansion planning, financial modeling, ERP implementation, internal controls, etc. This demonstrates the scope of initiatives they can credibly lead as your fractional CFO.

5. How do you establish trusted advisor relationships with clients as a fractional team member?

Cultural fit and earning trust is crucial. Listen for how they proactively build rapport, authority, and influence to get buy-in on financial guidance and leadership despite not being a full-time employee.

6. Walk me through your approach and methodology when starting work with a new client.

Look for a structured process they follow to ramp up quickly and deliver value from day one. A disciplined methodology illustrates their professionalism and experience seamlessly integrating into varied corporate cultures and hit the ground running. 

7. What differentiates you from other fractional CFOs? Why should I hire you versus someone else?

Experienced fractional CFOs should have a concise, compelling response ready on what makes them uniquely positioned to meet your needs. If they struggle to identify differentiation, it may signal a lack of competitive awareness and selling skills.

8. Can you share 1-2 specific examples of how you have created positive financial impact for past fractional clients?

Asking for quantifiable examples of value they have added for other clients provides tangible proof points on their capabilities. Look for examples of increased revenue, reduced costs, improved KPIs, more informed decisions, etc.

9. Based on what you know so far, what financial pain points or priorities do you think you could help with if we work together?

Their response demonstrates whether they have been actively listening and formed initial hypotheses around ways they can drive specific, meaningful impact if hired. Savvy fractional CFOs will have identified potential opportunity areas based on your business profile. 

10. What communication style and availability could I expect if we work together?

Get clarity on how you will interact day-to-day, meeting cadences, response times, and general availability. Also inquire about communication preferences – email, phone, virtual meetings, in person, etc.

11. Can you walk me through the typical workflow between you and a client throughout an engagement?

Understand exactly how you will interact on projects, exchange information, give feedback, and make decisions. Outline of workflow processes illustrates their approach to engagement management.

12. What is your hourly rate or fee structure for fractional CFO services? Are there minimum commitments or retainer expectations?

Have an open conversation about billing and payment terms. Expect fractional CFOs to have set fees but some flexibility. Get clarity on what is included and if there are minimum hour expectations to ensure availability.

13. What resources or team support is available to you that could benefit our work together? 

Even as an individual contractor, some fractional CFOs have access to broader team infrastructure – administrative, research, technical specialists, etc. These can enhance their capabilities.

14. What qualifications, credentials, and continuing education do you have as a finance expert?

Reputable fractional CFOs will have robust qualifications like CPA certifications, MBAs, stints at top tier professional service firms, and ongoing continuing education. This demonstrates their dedication to expertise.

15. Can you share 2-3 client references I can contact to learn about their experience working with you?

Speaking directly with past clients provides unfiltered insights into their work style, capabilities, and impact. Quality fractional CFOs should have happy clients willing to advocate for them.

Conclusion

Finding the right fractional CFO is a very significant decision that will have material impacts on your company’s financial foundation and strategic direction. It is a role with immense influence and responsibility, so taking the time to thoroughly vet candidates is an investment that will pay dividends.

In this guide, we’ve outlined the 15 most important questions to ask during your search process. Getting detailed, thoughtful responses to each question will provide you the comprehensive insights needed to make confident hiring choice.

Some key takeaways include:

– Seek out specialists with extensive fractional/part-time CFO experience specifically, not just general finance backgrounds. This demonstrates they can deliver on an interim basis.

– Prioritize fractional CFOs with experience in your precise industry and with companies at your stage of growth and maturity. Their past work should be highly relevant. 

– Ask for tangible examples of deliverables, impact, and value added from their time working with other clients. Specifics illustrate capabilities.

– Clearly communicate your expected working relationship in terms of availability, communication preferences, feedback mechanisms, and workflow.

– Gain visibility into their broader team infrastructure and resources that can supplement their abilities as an individual contributor.

– Get comfortable with fee structures and pricing by having transparent conversations about billing upfront. Understand what is included.

– Speak to past clients to get direct feedback on their work style, personality, and how value was delivered.

Making the right fractional CFO hiring decision can transform your financial function and strategic trajectory. While the evaluation process takes time, it is well worth the investment given the immense impact this role has over your company’s finances. Use this comprehensive question guide during your search process to ensure you find the ideal fit for the fractional CFO position.