A fractional CFO is a senior finance executive who works for several companies at once, usually one or two days a week each, on a monthly retainer. The company gets the judgment of someone who has run finance at a larger business for a fraction of a full-time salary. The arrangement is sometimes called a part-time CFO. It differs from an interim CFO, who works full-time for a few months to cover a vacancy.
What a fractional CFO owns
At a $1M to $100M company the job is the full-time CFO’s job, scaled to the hours available. It has five parts.
- Cash. A 13-week cash flow forecast, updated weekly, and the decisions that follow from it: when to draw on the line of credit, which bills to delay, how much runway is left.
- Reporting. A monthly close that lands by a fixed day and a short pack the CEO and board can read: revenue, gross margin, cash, burn and the handful of numbers that drive the business.
- Planning. The annual budget and a model the founder can use to test hiring, pricing and spending decisions before making them.
- Capital. The bank relationship, loan covenants, investor updates, and the model and data room for a raise.
- Controls. Who can approve a payment, how expenses are checked, and how the books are kept clean enough to pass due diligence.
Most fractional CFOs do not do the bookkeeping. They work on top of a bookkeeper or an outsourced accounting team. Some firms bundle bookkeeping, controller and CFO work in one fee, and others expect you to bring your own. Ask which you are buying.
Hours and fees
Most fractional CFOs at a $1M to $50M company work 4 to 16 hours a week. The time is uneven: heavier at month-end, before board meetings and during a raise. Published retainers run $3,000 to $12,000 a month, with $5,000 to $8,000 the common band for a $1M to $20M company. Multiple entities, inventory, foreign subsidiaries or an active fundraise push the fee toward the top of that range. The cost guide breaks the numbers down.
When to hire one
Most companies bring in a fractional CFO between $2M and $5M in revenue. The trigger is usually one of these: you are raising equity or debt and need a model an investor will believe; cash surprised you in the last six months; you added a second entity, a second country or a lender with covenants; the board asks questions the bookkeeper cannot answer; or you plan to sell the company in two to three years and want clean books before a buyer looks.
Who it is not for
A company under $1M with simple books usually needs a good bookkeeper and an accountant at tax time, and a founder who wants to understand the numbers can learn them through finance coaching for less. A fractional CFO also cannot fix books that are six months behind. Catch-up bookkeeping comes first, then the CFO. At the other end, a company running a finance team of eight or more people every day needs a full-time leader in the building.
What to look for
Industry matters more than most buyers expect. SaaS revenue recognition, ecommerce inventory costing and construction job costing are different skills. Ask whether the CFO has done the transaction you are planning, who on their team will do the day-to-day work, and which accounting systems they know.