A fraction of an executive: new ways to save and compete

Abstract

Purpose

A new way for business leaders to access targeted professional help is via fractional service providers. Fractional service providers can provide tremendous advantages, as they are much more closely associated with the company than outsourcing or consulting service providers, while being more cost effective than full-time employees. A fractional service provider that can be of particular benefit to startups and small businesses is a fractional CFO or Controller – who can provide an organization with the skills to perform all of the activities that a finance and accounting department should perform and provide a consistent leadership voice on all finance-related matters.

Design/methodology/approach

This paper first introduces fractional services and discusses how fractional service providers differ from outsourcing, consulting engagements and full-time employment. Then, it presents an explanation of why fractional service providers may be best suited to manage the finance and accounting functions in a small or medium-sized business. Finally, it discusses factors that business leaders should consider and best practices they should use when using fractional services.

Findings

Using a fractional CFO or Controller will provide an increased focus on the company’s financial health and allow the organization to perform (or oversee) all of the activities that a finance and accounting department should be performing. The scope of work a fractional CFO or Controller performs can be easily modified to meet the needs of the firm, Moreover, they require little direct management. As a result, a fractional CFO or Controller can often be a more cost-effective option than hiring for the finance and accounting function on a full-time basis.

Originality/value

In today’s world, organizations are increasingly seeking ways to maintain effectiveness while also being flexible in how human capital is used. This paper discusses one such flexibility: incorporating fractional service providers. The key premise of this paper is that fractional service providers, specifically fractional CFOs or Controllers, can be an extremely effective way for many organizations, especially small businesses and startups, to get more sophisticated help and guidance in finance and accounting-related matters – thereby acting as an excellent bridge between an ineffective finance and accounting function and creating such a function staffed by full-time employees.

Citation

So, M. and Teckchandani, A. (2023), "A fraction of an executive: new ways to save and compete", Journal of Business Strategy, Vol. 44 No. 4, pp. 211-218. https://doi.org/10.1108/JBS-02-2022-0024