A fractional CFO is an experienced chief financial officer who works for your company part time, for example one or two days a week, usually for a flat monthly fee. You get CFO-level work, like cash flow forecasting, financial reporting, budgets and bank relationships, without paying a full-time salary for hours you don’t need.
For contractors, a fractional CFO also owns the reports that run the business: the WIP schedule, job costing, and over and under billings. This guide covers what a fractional CFO does, how it compares with a full-time hire, and when it’s the right fit.
Fractional, part-time, outsourced or virtual CFO?
These names mostly describe the same thing: a senior finance leader who isn’t on your payroll full time.
- Fractional or part-time CFO: works a set part of the week or month for your company.
- Outsourced CFO: comes from an outside firm instead of being your employee.
- Virtual CFO: works mostly remotely, in your accounting system and over video calls.
- Interim CFO: a full-time CFO for a set period, often while you search for a permanent hire.
Our fractional CFOs are outsourced and work mostly remotely. In New Jersey and New York we can be in your office part of the week when the work needs it.
What a fractional CFO does
- Monthly financial statements and the KPIs you run the business on
- Cash flow forecasting, including a 13-week forecast
- Budgets, forecasts and planning for growth or a sale
- Bank and surety relationships: lines of credit, bonding and covenant reporting
- Oversight, and training when needed, for your accounting staff
- For contractors: the WIP schedule, job costing, and over and under billings
The work changes with the company. At some clients we oversee a strong accounting team and focus on reporting. At others we fix errors every month or fill gaps the team doesn’t have time for.
Fractional CFO vs. full-time CFO
| Fractional CFO | Full-time CFO | |
|---|---|---|
| Time | Part of the week, for example one or two days | Five days a week |
| Cost | A flat monthly fee for the time you need | A full salary of $200,000 to $250,000 a year in the New York and New Jersey market, plus taxes and benefits |
| If they leave | A firm with a team behind the CFO | You start the search over |
| Best for | Companies that need CFO-level work, but not 40 hours of it | Companies with more than about three days a week of work, or owners who want someone in the office every day |
Past about three days a week, a fractional CFO usually costs about the same as, or more than, a full-time hire. That’s usually when we recommend hiring full time.
When finance hires kept leaving
A construction company in the New York and New Jersey area kept losing its finance hires. Construction is fast-paced and high-stress, and the office was a hard commute, so people moved on. The owners were about to spend $250,000 to $300,000 a year on another full-time CFO. Once we looked at their books, we saw we could do the work in one or two days a week, because we could streamline how information came out of their accounting system. It cost them significantly less than a full-time hire.
How we work as your fractional CFO
- We start with a free review of your books to see how much time you really need.
- If the books need cleanup, we begin with a development phase: we clean up the books and build your monthly models and reports, with weekly or biweekly check-ins.
- Then we move to a flat monthly fee. We don’t bill by the hour, and calls, emails and meetings are included, so you never have to think twice about picking up the phone.
- The fee depends on time and complexity, not revenue: how clean the books are, how strong your accounting staff is, and what your bank or surety needs. See pricing and how it works.
When a fractional CFO is the right fit
- You only find out how a job did when it’s finished.
- The numbers say you’re profitable, but cash is always tight.
- Your bank or surety wants reports you can’t easily produce.
- Your accounting staff needs oversight or training.
- You’re planning to grow, add financing or sell.
It’s not the right fit if you want someone in the office every day, or if you have enough work for a full-time CFO. Our guide on how to hire a CFO covers that decision.
How we help
We’re fractional CFOs and controllers for contractors. See our fractional CFO services for contractors, our outsourced controller services, or all our construction services.
FAQs
What is a fractional CFO?
A senior finance leader who works for your company part time, for a monthly fee, instead of as a full-time employee.
What does a fractional CFO do?
Financial reporting, cash flow forecasting, budgets, bank and surety relationships, and oversight of your accounting staff. For contractors, also the WIP schedule and job costing.
Is a fractional CFO the same as a part-time or virtual CFO?
Mostly, yes. Fractional and part-time mean the same thing, and virtual means the work is mostly remote. An interim CFO is different: full time for a set period.
How much time does a fractional CFO spend with a company?
It depends on how clean the books are, how strong your staff is and what your bank or surety needs. For one construction client it was one or two days a week.
When should you hire a full-time CFO instead?
When the work takes more than about three days a week, when you want someone on site every day, or when the company has outgrown part-time help.
