What Is a Fractional vs Interim CFO?

By Jennifer Cho

I often hear my colleagues and peers use the terms “interim” and “fractional” interchangeably. But they are not the same. FLG Partners provides both interim and fractional CFO services, but each differs in skill sets, timelines, and objectives. And so I’m writing this post to define each, clarify their differences, and share when companies require interim vs. fractional services.   

Demand for Fractional and Interim CFO Services Continues to Rise 

I’m seeing that companies are continuing to rethink how and when they hire senior executives. Part-time senior leadership has become more viable, affordable, and, in many ways, practical.

Harvard Business Review reports that this shift is largely driven by the ability to access highly specialized leaders more readily, without incurring the cost of a full-time hire.   

The role of the Chief Financial Officer is the most popular “fractional” role of the C-suite, and it is increasing. Reporting from The Wall Street Journal highlights how companies are turning to temporary CFOs, often referred to as “rent-a-CFOs,” to navigate funding events, leadership gaps, and complex financial transitions. 

Cost, as it often is, remains a key driver. CFO salaries vary widely, but the median CFO salary in the US is just shy of $450K, excluding bonuses and equity awards, health insurance, retirement plans, and other benefits. This makes pre-mature full-time CFO hires more difficult to justify. 

Meanwhile, the CFO role continues to shift. Well beyond the financial reporting of a decade or so ago, financial leaders are now additionally expected to drive strategy, transformation, and investor communication. 

That increased scope raises the bar for experience and makes flexible models more attractive not only for companies but also for senior executives, many of whom are turning to a more freelance-style work environment. 

Bottom line: Companies want senior finance leadership. They just don’t always want (or need) it full-time.  

–> Enter fractional and interim leadership. 

What is a Fractional CFO? 

A fractional CFO is a part-time, ongoing finance leader embedded in the business. 

• Works a defined number of hours or days per week or month 

• Focuses on strategy, planning, and financial discipline 

• Scales up or down with the company’s needs

A fractional CFO gives you senior financial leadership without the full-time cost. 

What is an Interim CFO? 

An interim CFO is a temporary executive brought in for a defined period. 

• Operates as the acting CFO 

• Leads the finance function day-to-day 

• Typically fills a gap during transition 

 An interim CFO runs your finance function until you hire a permanent leader or complete a critical event. 

Fractional vs. Interim: Key Differences

Here’s a quick breakdown of the differences and benefits of working with a fractional vs. interim CFO, based on your organization’s needs:

When to hire a fractional CFO 

Hire a fractional CFO when you need strategic capability without the full-time coverage. 

Common fractional CFO use cases:

Growth-stage companies
You have a controller or VP of Finance, but need senior oversight.

Leverage a fractional CFO to:

• Build financial models
• Support board reporting
• Manage cash runway
• Raise equity or debt finance 
  

Improving financial discipline
Revenue is growing, but visibility and reporting are weak.

Leverage a fractional CFO to:

• Forecast and plan
• Develop KPIs
• Improve margins

Fundraising preparation
You need credibility with investors.

Leverage a fractional CFO to:

• Create investor-ready financials
• Model scenarios
• Prepare the data room 

When to hire an interim CFO 

Hire an interim CFO when you need immediate leadership and cannot afford a gap. 

Common interim CFO use cases:

CFO departure
Many companies require coverage during the lengthy full-time hiring and onboarding process.

Leverage an interim CFO to: 

• Maintain reporting cadence 
• Stabilize the team and provide leadership 
• Manage board expectations 
• To act as a thought partner to the CEO and provide strategic support to the executive team
  

Transaction readiness
Interim CFOs are often hired during periods that require specialized skill sets, such as turnarounds, M&A, fundraising, IPOs, carve-outs, or refinancing.

Financial or operational stress
Interim CFOs can be especially helpful during challenging times, providing credibility and control.  

First-time CFO needs coaching and mentoring
New CFOs frequently require guidance through major company milestones.  

 To summarize: if there’s a gap in leadership, hire an interim CFO.  If you need a strategic lift, go fractional.   

A Smarter Approach: Phased CFO Leadership 

We are starting to see more companies use a phased hiring model that better aligns with costs and needs.  

1. Interim CFO during transition 
2. Fractional CFO for ongoing support 
3. Full-time CFO when scale justifies it 

The Benefits of Interim and Fractional CFO Leadership 

Every CFO at FLG Partners has substantial full-time CFO experience. This has been a mandatory hiring requirement for us since the beginning. There’s a breadth of experience gained from knowing how things run on the inside that remains important. That said, there are many benefits to hiring beyond the scope of the standard full-time employee, but these are consistently the biggest three:  

Speed – Hiring a full-time CFO can take 3-6 months, sometimes longer. Temporary CFOs can begin almost immediately. And there’s no need for a long onboarding, either. An interim CFO can get right to work on what needs to be done.

Expertise – Sometimes you need a narrow focus. It could be fundraising, a merger or acquisition, perhaps a carveout, or an IPO. Not every CFO can (nor should they) manage every type of situation. Companies can now hire an industry-specific CFO to guide them through their unique situation. 

Cost Savings – Fractional CFOs can cost significantly less than hiring a full-time CFO and can flex up or down as needed.  

How Does FLG Partners Fit? 

FLG Partners delivers both fractional and interim CFO leadership with one advantage most firms cannot match: depth of experience. With more than 950 cumulative years of CFO expertise, FLG provides operators who have led companies through growth, transactions, and complex transitions.  

It’s important to remember that not all CFOs are the same. CFOs with less experience are likely more suited to early-stage companies, whereas organizations with more complex business needs would likely benefit from a CFO with industry-specific expertise, niche financial mastery (M&A, IPO, etc.), and enterprise-level CFO experience.  

Whether you need a part-time strategic partner or a full-time leader to step in immediately, FLG matches the right CFO to the situation and ensures execution from day one. 

Connect with our team if you’re unsure if a fractional or interim CFO is right for you. We’re happy to assess your situation and make a recommendation.