A $6 million company brought on a full-time CFO at $280,000 plus benefits. Six months later, the CEO realized the CFO spent three days a week on work a senior accountant could handle and two days on the strategic work that actually justified the title. The company was paying full-time rates for a part-time need.
That mismatch is the reason fractional CFOs exist. A fractional CFO provides the same strategic financial leadership as a full-time hire — forecasting, fundraising support, board reporting, cash flow management — but works on a part-time or project basis. You get CFO-level thinking without building a CFO-level cost into your payroll.
The model has gone from niche to standard. As companies delay full-time executive hires and prioritize capital efficiency, fractional CFO engagements have become the default for businesses between $1 million and $30 million in revenue. This guide explains what the role involves, what it costs, how it compares to full-time, and how to determine whether it’s right for your business.
What Does a Fractional CFO Do?
A fractional CFO provides strategic financial leadership on a part-time basis, typically working 15 to 40 hours per month with a single client. They handle the decisions and analysis that sit above bookkeeping and accounting — the work that turns financial data into business strategy.
Core responsibilities include:
Financial forecasting and modeling. Building the models that answer questions like: what happens to cash if revenue grows 20%? What if it shrinks 15%? How many months of runway do we have at current burn? These models drive every major decision — hiring, expansion, pricing, fundraising timing.
Cash flow management. Monitoring cash position, projecting future shortfalls, and implementing strategies to maintain liquidity. For growing companies, cash flow problems often surface 60-90 days before they become crises. A CFO builds the systems that catch them early.
Fundraising and investor relations. Preparing financial packages for investors, building data rooms, supporting due diligence, and presenting at board meetings. Investors expect financial sophistication — a CFO delivers it.
Board and management reporting. Translating raw financial data into reports that non-finance executives and board members can act on. Budget vs. actual analysis, KPI dashboards, and variance explanations that connect financial results to operational decisions.
Strategic planning. Evaluating whether to hire, expand, acquire, or raise capital — and modeling the financial impact of each option before the decision is made. This is the highest-value work a CFO performs, and it’s the work that justifies the role.
Financial infrastructure. Selecting and implementing accounting systems, building reporting processes, and establishing internal controls that scale with the business. A fractional CFO often builds the foundation that a future full-time CFO inherits.
What a fractional CFO does NOT do: Day-to-day bookkeeping, transaction categorization, accounts payable processing, payroll administration, or tax preparation. Those are outsourced accounting functions — essential, but distinct from CFO work. Understanding the difference between a CFO and a controller prevents the most common hiring mistake in finance: paying CFO rates for controller-level work.
How a Fractional CFO Works in Practice
The engagement model varies, but most fractional CFOs operate on a monthly retainer with a defined scope of hours and deliverables.
Typical structures:
| Engagement Level | Hours/Month | What’s Included | Best For |
|---|---|---|---|
| Advisory | 5–10 | Monthly financial review, ad hoc strategic guidance, board prep | Early-stage companies with clean books but no financial strategy |
| Standard | 15–25 | Forecasting, cash flow management, board reporting, KPI tracking | Companies at $2M–$10M revenue with active strategic needs |
| Intensive | 25–40 | Full strategic coverage, fundraising support, M&A prep, team oversight | Companies at $10M+ or in a high-complexity phase (fundraise, acquisition, restructuring) |
Most engagements start with a ramp-up period of 4-6 weeks. The CFO learns your business, reviews your financials, assesses your systems, and identifies the highest-priority gaps. Then the cadence settles into a rhythm: weekly or biweekly calls, monthly reporting, and strategic work in between.
Communication happens where you work. Modern fractional CFOs operate in Slack, email, and shared dashboards — not formal memos delivered quarterly. The good ones respond within hours, not days.
The relationship is month-to-month. Unlike a full-time hire with a severance package, fractional engagements can scale up during intense periods (fundraising, M&A) and scale down during quieter months. You’re paying for the work that exists, not a seat that needs to be filled.
Fractional CFO vs. Full-Time CFO
The decision between fractional and full-time comes down to three questions: how many hours of CFO-level work exist per week, what you can afford, and whether you need daily availability.
| Factor | Fractional CFO | Full-Time CFO |
|---|---|---|
| Annual cost | $48,000–$180,000 | $200,000–$400,000+ (salary + benefits + equity) |
| Hours per month | 15–40 | 160+ |
| Equity expected | Rarely | 0.5%–2% depending on stage |
| Time to start | 1–2 weeks | 3–6 months to recruit |
| Scalability | Flex up/down monthly | Fixed commitment |
| Best for | $1M–$30M revenue, defined strategic needs | $15M+ revenue, complex daily operations |
| Availability | Scheduled + responsive | Full-time presence |
The math is stark. A full-time CFO at $300K salary plus $75K in benefits and overhead costs $375K per year. A fractional CFO at $8,000 per month costs $96K — about 25% of the full-time price. For companies that don’t generate 40 hours per week of genuine CFO-level work, the fractional model delivers the same strategic output at a fraction of the cost.
The inflection point for going full-time typically arrives at $15M–$30M in revenue, or when the volume of strategic finance work consistently exceeds 30 hours per week. Some companies reach that threshold at $10M if they’re in complex industries or running active M&A. Others don’t reach it until $50M.
For a detailed comparison of the two models, see our breakdown of fractional CFO vs. full-time CFO.
What Does a Fractional CFO Cost?
Fractional CFO pricing ranges from $3,000 to $15,000+ per month depending on hours, complexity, and the provider’s experience level.
| Business Stage | Typical Monthly Cost | Hours/Month | Context |
|---|---|---|---|
| Early-stage ($500K–$2M revenue) | $3,000–$5,000 | 10–15 | Fundraising prep, basic forecasting, investor reporting |
| Growth ($2M–$10M revenue) | $5,000–$10,000 | 15–25 | Full strategic coverage, board reporting, cash management |
| Mid-market ($10M–$30M revenue) | $8,000–$15,000+ | 20–40 | Complex operations, M&A, team oversight, capital strategy |
What drives cost:
Scope — more strategic functions mean more hours Complexity — multi-entity structures, international operations, or active M&A require more experienced (and more expensive) CFOs Stage — later-stage companies need more sophisticated deliverables Geography — rates are higher in major metro markets, though the gap has narrowed
For a complete breakdown of pricing models, hourly vs. retainer structures, and what’s typically included, see our guide to fractional CFO cost. If you’re comparing this against what you’d pay a full-time CFO at your stage, the cost gap is significant.
Who Uses Fractional CFOs?
The model works across company types, but certain profiles benefit most:
Startups and venture-backed companies. The most common use case. Startups need CFO-level work — fundraising prep, burn rate management, investor reporting — but can’t justify a $300K+ hire. A fractional CFO for startups fills the gap from seed through Series B.
Small and mid-size businesses ($2M–$30M revenue). Companies that have outgrown their bookkeeper but haven’t reached the scale for a full-time CFO. They need financial planning, cash flow management, and strategic guidance — not just accurate books.
Franchise and multi-location operators. Financial complexity multiplies with each location. Consolidated reporting, unit-level economics, and expansion modeling are CFO-level problems. Franchisees often pair outsourced accounting with fractional CFO support tailored to multi-unit operations.
Private equity-backed businesses. PE firms expect board-ready financials, rolling forecasts, and operational KPI tracking from their portfolio companies. A fractional CFO delivers these without adding permanent headcount to the cost structure.
Companies in transition. M&A activity, leadership changes, rapid growth, or a pivot all create temporary spikes in strategic finance work. A fractional CFO provides coverage during the transition without a long-term commitment.
Signs Your Business Needs a Fractional CFO
Not every business needs one right now. But if any of these sound familiar, you’ve likely outgrown your current financial infrastructure:
You’re making decisions based on intuition instead of financial data. Not because you don’t value data — but because nobody is producing the analysis you’d need.
Your board or investors are asking questions your team can’t answer. Revenue cohort analysis, LTV/CAC, cash runway scenarios — these are CFO deliverables.
You’re preparing to raise capital. The financial model, data room, and due diligence support that investors expect take months to build properly. Starting too late means cutting corners.
Cash flow surprises keep happening. If you’ve been caught short on cash more than once, the issue isn’t bad luck — it’s inadequate forecasting.
Your controller or bookkeeper is being asked to make strategic decisions. They’re flagging questions they can’t answer: should we renegotiate this lease? Can we afford to hire ahead of plan? Those are signals you’ve outgrown your current setup.
You’re evaluating a major decision — acquisition, expansion, new market entry — and nobody on the team can model the financial impact.
If you’re weighing whether fractional support is the right move, we’ve broken down the decision in detail: Should I Hire a Fractional CFO?
How to Choose a Fractional CFO
The market has expanded rapidly, and quality varies. Here’s what to evaluate:
Industry experience. A CFO who has worked with businesses like yours — same stage, similar complexity, related industry — will ramp faster and deliver better advice. Ask for specific examples, not general claims.
Stage fit. A CFO who spent their career at Fortune 500 companies may be brilliant but calibrated to a different operating environment. You want someone who understands your constraints, not just your goals. Look for the right qualifications and background.
Deliverable clarity. Before engaging, define what you’ll receive: monthly financial packages, board decks, rolling forecasts, KPI dashboards. The best fractional CFOs set clear expectations about what’s included and what’s out of scope.
Communication style. Your CFO should be able to explain financial concepts to non-finance people — your co-founder, your board, your ops team. If they can’t do this in the interview, they won’t do it when it counts.
References at your stage. Ask to speak with 2-3 clients at similar revenue and complexity levels. The conversations will reveal more than any sales pitch.
For a structured evaluation framework, see our guide on how to choose a fractional CFO.
Frequently Asked Questions
What is a fractional CFO?
A fractional CFO is a senior financial executive who works with a company on a part-time or project basis rather than as a full-time employee. They provide the same strategic services as a full-time CFO — financial planning, forecasting, fundraising support, board reporting, and cash flow management — at a fraction of the cost, typically working 15 to 40 hours per month.
How much does a fractional CFO cost?
Most fractional CFOs charge between $3,000 and $15,000 per month depending on hours, scope, and complexity. Early-stage companies typically pay $3,000–$5,000 per month. Growth-stage companies pay $5,000–$10,000. Mid-market companies with complex operations pay $8,000–$15,000+. Annual cost ranges from $48,000 to $180,000 — compared to $250,000–$400,000+ for a full-time CFO.
When should I hire a fractional CFO?
The most common triggers are: preparing for a fundraise (start 4-6 months early), experiencing recurring cash flow surprises, needing board-ready financial reporting, evaluating a major strategic decision like an acquisition or expansion, or discovering that your bookkeeper or controller is being asked to answer questions beyond their role.
What’s the difference between a fractional CFO and an outsourced CFO?
In practice, the terms are used interchangeably. Both refer to a part-time CFO engaged on a contract basis rather than as an employee. Some firms use “outsourced CFO” to describe a service offering and “fractional CFO” to describe an individual. The deliverables and engagement model are the same.
Can a fractional CFO help with fundraising?
Yes — this is one of the most common reasons startups engage a fractional CFO. They build the financial model, prepare the data room, support due diligence, and often present alongside the CEO in investor meetings. Engaging a CFO 4-6 months before a planned raise gives enough time to build investor-ready financials and clean up any issues.
A fractional CFO isn’t a cheaper version of a real CFO. It’s the right-sized version for companies that need strategic financial leadership but don’t have 40 hours a week of CFO-level work. The model delivers the insight, analysis, and accountability that transforms how you make financial decisions — without the overhead of a full-time executive hire.
