Your CFO Needs a CFO
The Second Chair, Part 1. Even a brilliant CFO is a team of one. Here’s what changes when they’re not, and why CFO support is worth as much to businesses that already have a finance chief as to those that don’t.
The short version
- Fractional CFOs are usually pitched to businesses that can’t justify a full-time CFO. Some of the most valuable work is for businesses that already have a good one.
- The CFO is often the most isolated person in the leadership team: everyone brings them problems, but few can help them think one through.
- A growing finance function eventually needs rebuilding, and the person running it day to day rarely has the time to transform it as well.
- Fundraises, acquisitions and exits happen a handful of times in a career. An experienced second pair of hands brings the repetitions your CFO may not have.
- Support usually takes one of four forms: a sounding board, senior capacity for a big moment, leading a transformation, or independent eyes for the board.
Most of what you read about fractional CFOs says the same thing. You need senior finance expertise, you can’t justify a full-time salary, so you buy a few days a week instead.
That’s true. But it’s only half the story, and it’s the half that undersells the whole idea.
Some of the most valuable work we do at WrightCFO is for businesses that already have a CFO. A good one. Sometimes a brilliant one.
Here’s why.
The loneliest seat in the building
The CEO has a board, a chair, perhaps a coach and a WhatsApp group full of other founders. Sales has a team. Operations has a team.
The CFO has the numbers. Everyone brings them problems, and very few people can help them think one through. They can’t easily say “I’m not sure” to the CEO, because being sure is the job. Their own team reports to them. The auditors sit on the other side of the table.
So the biggest calls (how to structure the raise, whether the forecast is honest, when to push back on the board) often get made alone, late at night, in a spreadsheet. (That’s not a figure of speech: in one recent survey of UK and Irish finance leaders, almost all said they work evenings or weekends.)
Having another CFO to test that thinking with isn’t a luxury. It’s quality control on the most consequential decisions in the business.
You can’t renovate a house while hosting a dinner party
Every growing business outgrows its finance function eventually. Month-end creeps from five days to fifteen. The systems that coped at £3M groan at £15M. The board pack becomes a monthly act of heroics rather than a process.
Everyone knows it needs fixing, the CFO most of all. The trouble is that the person who knows the function best is also the person running it every day. Payroll still has to go out. The board pack still has to land. The bank still wants its covenant report.
So the transformation gets squeezed into evenings, slips a quarter, then slips another.
Bringing in a second senior pair of hands to lead the rebuild, while your CFO keeps the lights on, is usually faster and far less painful than asking one person to do two full-time jobs. (ICAEW’s guidance on finance transformation is a useful primer on what a rebuild involves.)
The deals they’ve never done before
Your CFO may be superb at running a scaling business. But how many fundraises have they led? How many acquisitions? How many exits?
For most people the honest answer is one or two, if any. These events come round a handful of times in a career, and they’re exactly when experience pays for itself: knowing what the buyer’s due diligence team will ask in week three, what a clause in the term sheet will cost you in five years, and where the deal usually wobbles. (The Body Shop and what happens after a PE deal are two examples of how much rides on getting that right.)
That isn’t a gap in your CFO’s ability. It’s a gap in repetitions. You’d want the surgeon who does this operation every week, and the same logic applies here.
What does CFO support actually look like?
It varies, but it’s usually one of these:
- A sounding board. Regular time where your CFO can test their thinking with someone who has sat in the same seat.
- Senior capacity for a big moment. A fundraise, an acquisition, a refinancing or an exit, run alongside the day job. Then we step back.
- Leading a transformation. We rebuild the processes, systems and reporting while your team keeps the business running, then hand over something that works.
- Independent eyes. For boards and investors who want an objective view of the finance function.
None of it replaces your CFO. The point is to make them more effective and, frankly, to make the job sustainable.
If you’re a CFO reading this
Asking for support isn’t an admission that you can’t cope. The best CFOs I know are the ones who know exactly where their experience runs out, and bring people in before it matters.
If you’re a founder or CEO
Try asking your CFO one question this week: “What would you do with a second senior pair of hands for three months?”
I suspect the answer will come quickly.
Fractional isn’t only for businesses that can’t afford a full-time CFO. Sometimes it’s for the ones that have a great CFO and want to keep them.
This is the first in a new series I’m calling The Second Chair. Over the next five weeks I’ll take each of these in turn, starting next with why your CFO can’t fix the finance function on their own.
If any of this sounds familiar, from either side of the desk, my inbox is open. You can book thirty minutes directly with me here, or get in touch.
Sophie
Frequently asked questions
Can a business with a full-time CFO also use a fractional CFO?
Yes. Businesses that already have a capable CFO use a fractional CFO as a sounding board, for extra senior capacity during a fundraise, acquisition or exit, to lead a finance transformation, or to give the board an independent view. It complements the in-house CFO rather than replacing them. Here’s an example from a £1.2bn business.
What is CFO support?
CFO support means bringing in an experienced finance leader to work alongside an existing CFO, either on a regular basis or for a defined project. It can range from a monthly thinking session to running a transaction or rebuilding the finance function.
Why do CFOs need support?
CFOs carry high-stakes decisions with few peers to test them against, and the workload is heavy: in AccountsIQ’s survey of UK and Irish finance leaders, 85% said they would need a six-day week to manage it. An experienced peer improves the quality of decisions and makes the role more sustainable.
When should a CFO bring in extra help?
Common moments are a fundraise, acquisition, refinancing or exit; a finance function that has outgrown its systems and processes; month-end or board reporting that relies on heroics; and any decision where the CFO would value a second experienced opinion before taking it to the board.
What is the difference between CFO support and a financial controller?
CFO support is strategic: decisions, transactions and the shape of the finance function. A financial controller focuses on accurate numbers, reconciliations, systems and month-end processes. Some businesses need both.
Sophie Wright is the founder of WrightCFO, a fractional CFO practice of eleven Chartered Accountants founded in 2014. We work with founder-led and private equity-backed businesses across the UK. See our services, or read Twelve Years of Running a Fractional CFO Practice. Twelve Things I Got Wrong.
Photo by Aaron Burden on Unsplash.
