A fractional CFO is a senior finance executive who provides strategic financial leadership to multiple businesses on a flexible basis, delivering the expertise of a full-time chief financial officer without the permanent commitment or cost.
For startups and scale ups navigating fundraising, rapid growth, or increasing financial complexity, this model offers a way to access C-suite capability years earlier than traditional hiring would allow.
This guide covers what fractional CFOs actually do, how they differ from other financial roles, what they cost, and how to know when your business is ready for one.
Ready to hire a fractional CFO? Join Connectd to find experienced fractional finance leaders who can help your business grow.
Key takeaways
- A fractional CFO is a senior finance leader who works with multiple businesses on a flexible basis, delivering strategic financial expertise without the cost or commitment of a full-time hire
- Startups and scale ups benefit most from fractional CFOs during fundraising, rapid growth, or when financial complexity outpaces internal capability
- Costs typically range from £100–300 per hour in the UK, with engagement models including day rates, monthly retainers, and project-based fees
- Fractional CFOs focus on strategy rather than bookkeeping, handling financial planning, cash flow management, investor relations, and systems implementation
What is a fractional CFO?
Think of a fractional CFO as your part-time finance director operating at board level. They bring the same strategic capability you'd expect from a permanent chief financial officer - financial modelling, investor relations, cash flow forecasting - but work across multiple businesses simultaneously rather than dedicating themselves exclusively to one organisation.
The "fractional" element refers to sharing time and capability across multiple organisations. This model allows startups and scale ups to access C-suite calibre financial expertise far earlier than traditional hiring would permit, bringing the same strategic rigour expected from a permanent hire without the associated salary, benefits, and long-term commitment.
One important distinction: fractional CFOs are not bookkeepers or accountants focused on historical compliance. They operate at board level, shaping financial strategy, preparing businesses for investment, and providing the commercial insight that drives growth.
How does a fractional CFO compare to other options?
Understanding where a fractional CFO fits alongside other financial roles helps clarify when this model makes sense for a growing business.
Fractional CFO vs full-time CFO
A full-time CFO dedicates their entire focus to one organisation, becoming deeply embedded in daily operations and company culture. However, the cost - often over £150,000 annually, plus benefits and equity - makes this premature for most early-stage businesses.
A fractional CFO offers the same strategic capability at a fraction of the investment. Engagements flex with business needs, and startups gain access to experienced leadership without committing to overhead they cannot yet sustain.
Fractional CFO vs accountant
Accountants excel at compliance, tax returns, and historical financial reporting. They ensure the numbers are accurate and regulatory requirements are met.
A fractional CFO, on the other hand, uses that financial data to look forward through building models, forecasting scenarios, and advising on strategic decisions. Put simply: the accountant tells you what happened, while the CFO helps you decide what to do next.
Fractional CFO vs finance director
The distinction here often comes down to seniority and scope. A finance director typically focuses on operational finance management - overseeing the finance function, managing teams, and ensuring processes run smoothly.
A CFO operates at board level with broader strategic responsibility, including investor relations, M&A activity, and long-term financial architecture. For many growing businesses, a fractional CFO provides the strategic layer while existing finance staff handle day-to-day operations.
What does a fractional CFO do?
The scope varies depending on business stage and specific challenges, though several core responsibilities appear consistently across engagements.
Financial strategy and planning
Fractional CFOs build financial models that connect business goals to realistic financial outcomes. This work includes setting budgets, creating long-term roadmaps, and stress-testing assumptions before major decisions.
Cash flow management
Cash is the lifeblood of any growing startup or scale up, with 82% of small businesses failing due to cash flow problems. Fractional CFOs forecast cash positions, manage working capital, and ensure the business maintains sufficient liquidity to operate and invest in growth.
Fundraising and investor relations
Preparing for investment rounds demands financial credibility. Fractional CFOs create investor-ready financial projections, build pitch deck financials, and often join investor meetings to field detailed questions about the numbers.
Financial reporting and compliance
While not focused on day-to-day bookkeeping, fractional CFOs oversee management accounts, ensure regulatory compliance, and prepare board-level financial reports that inform strategic decisions.
Systems and process implementation
Many startups outgrow their initial financial infrastructure. Fractional CFOs select and implement appropriate finance software, establish internal controls, and professionalise financial operations to support the next stage of growth.
Benefits of hiring a fractional CFO
The advantages extend beyond simple cost savings, though that remains significant for early-stage businesses.
- Cost-effective access to senior expertise: CFO-level strategic thinking without the full-time salary, benefits, and equity package
- Flexibility to scale engagement: Increase hours during intensive periods like fundraising, then reduce during steadier phases
- Stronger investor confidence: Experienced financial oversight reassures investors that their capital will be managed wisely
- Objective strategic perspective: An external viewpoint unburdened by internal politics or historical assumptions
- Faster time to impact: Experienced fractional CFOs often deliver value within days rather than the months required for traditional hiring
- Reduced hiring risk: The opportunity to test senior financial leadership before committing to a permanent hire
Looking for fractional CFO support? Connectd's community includes experienced finance leaders ready to help startups and scale ups navigate their next growth phase. Join Connectd to explore your options.
Potential drawbacks of a fractional CFO
Balanced decision-making requires understanding the limitations alongside the benefits.
Limited availability compared to full-time hires
Fractional CFOs split their time across multiple clients. They may not be available for every meeting or urgent request, which makes clear communication about priorities and response times essential from the outset.
Less embedded in company culture
Building deep understanding of team dynamics and internal context takes longer when someone works with you intermittently rather than daily. This can affect how quickly they grasp unwritten rules and relationships within the organisation.
Managing confidentiality across multiple clients
Businesses working with fractional CFOs who also support other companies - potentially including competitors - benefit from clear agreements about information boundaries and confidentiality expectations.
Signs your business needs a fractional CFO
Several scenarios suggest the timing is right for fractional CFO support:
You are preparing to raise funding
Investors expect robust financial models, credible projections, and someone who can discuss the numbers with authority. A fractional CFO brings both the technical capability and the credibility that fundraising demands.
Cash flow has become unpredictable
Revenue may be growing, yet forecasting when money will arrive or depart feels increasingly difficult. This complexity often signals the need for more sophisticated financial oversight.
Financial decisions feel overwhelming
When founding teams spend more time wrestling with financial questions than focusing on core business activities, external expertise can restore balance and clarity.
You have outgrown your accountant
Your accountant handles compliance well but cannot advise on strategic financial decisions. This gap between operational accounting and strategic finance is precisely where fractional CFOs add value.
You need strategic input, not daily execution
The business requires leadership-level financial guidance rather than someone processing invoices and reconciling accounts.
How much does a fractional CFO cost?
Pricing varies based on experience, sector expertise, and engagement complexity.
Common pricing models
Three engagement structures appear most frequently:
- Day rate: Payment for specific days worked, offering maximum flexibility for both parties
- Monthly retainer: Fixed fee for agreed hours or scope, providing predictable costs and consistent access
- Project-based: One-off fee for defined deliverables such as fundraising preparation or financial systems implementation
UK market rate ranges
Hourly rates typically range from £125 – 250 depending on experience and specialisation. While this represents a premium compared to accounting services, it remains significantly more accessible than a full-time CFO salary plus benefits.
Factors that influence cost
Several variables affect what a fractional CFO charges:
- Industry specialism and sector expertise
- Complexity of financial operations
- Time commitment required
- Geographic location
- Urgency of need
Fractional CFO vs full-time CFO
| Factor | Fractional CFO | Full-time CFO |
|---|---|---|
| Cost | Lower overall investment | Higher salary, benefits, equity |
| Availability | Scheduled days or hours | Always available |
| Commitment | Flexible, project-based | Long-term employment |
| Experience breadth | Exposure across multiple businesses | Deep single-company focus |
| Best for | Startups, scale ups, transitional periods | Established businesses with complex ongoing needs |
The fractional model provides CFO capability at 50-70% less than full-time cost, making strategic financial leadership accessible earlier in the business journey. Full-time hires become appropriate when financial complexity demands constant attention and the business can sustain the investment.
How to hire a fractional CFO
Finding the right fractional CFO involves several practical steps.
1. Define your financial priorities
Identify specific challenges - fundraising, cash flow, reporting, systems - as this shapes the expertise you need. The clearer your brief, the better the match.
2. Assess experience and industry fit
Look for fractional CFOs with relevant sector experience and a track record with businesses at similar stages. Someone who has supported pre-Series A startups brings different insight than someone focused on established scale ups.
3. Evaluate cultural alignment
Ensure their working style and communication approach fits your team dynamic. A fractional CFO who prefers formal reporting may not suit a fast-moving startup that operates on Slack and quick calls.
4. Check credentials and references
Verify qualifications (ACA, ACCA, CIMA) and speak with previous clients about their impact. Past performance remains the best indicator of future value.
5. Agree on engagement structure
Clarify hours, availability, deliverables, and how success will be measured. Setting expectations upfront prevents misunderstandings later.
How fractional CFOs work with your team
Fractional CFOs typically integrate through regular touchpoints with the founding team, often weekly or fortnightly, depending on the level of engagement. They collaborate with existing finance staff or external accountants rather than replacing them.
Many fractional CFOs join board meetings or investor calls as needed, providing the financial authority these situations demand. The relationship works best when communication channels are clear and expectations about availability are established from the start.
Why fractional CFOs are in demand
The rise of fractional CFO roles reflects a broader shift toward flexible leadership models in startups and scale ups. Businesses increasingly want expertise matched to their stage rather than premature full-time hires that strain runway.
Remote working has normalised distributed leadership arrangements, part of the rise of portfolio careers dissolving geographical barriers that once limited access to senior talent. Founding teams can now access best-fit expertise rather than settling for local availability.
Building a fractional leadership layer for your startup
Fractional CFOs often form part of a broader fractional leadership approach. Many growing businesses combine fractional CFOs with fractional CMOs, CTOs, advisors and NEDs - accessing the right expertise at the right time, all without the overhead of premature permanent hires.
This model allows startups and scale ups to build genuine leadership capability while preserving runway and maintaining flexibility - a part of broader trends reshaping the startup ecosystem. The key lies in matching expertise to business stage and specific challenges.
Join Connectd to connect with experienced fractional CFOs and build the leadership capability your startup needs.
FAQs about fractional CFOs
Do you need a CPA or ACA to be a fractional CFO?
No formal qualification is legally required, though most fractional CFOs hold professional accounting qualifications such as ACA, ACCA, or CIMA, combined with substantial commercial experience.
How many hours per week does a fractional CFO typically work with one client?
Engagement varies widely based on business needs, ranging from a few hours monthly for advisory input to several days weekly during intensive periods such as fundraising.
Can a fractional CFO help with due diligence for acquisition?
Yes, fractional CFOs frequently support both buy-side and sell-side due diligence, preparing financial documentation and responding to investor or acquirer enquiries.
What happens when a business outgrows its fractional CFO arrangement?
The fractional CFO often helps hire and onboard a full-time CFO, ensuring smooth transition and knowledge transfer before stepping back.
How do fractional CFOs handle confidentiality when working with multiple clients?
Professional fractional CFOs maintain strict confidentiality boundaries, typically avoiding direct competitors and ensuring sensitive information remains protected through clear agreements.
Is a fractional CFO the same as a finance director?
The terms overlap but differ in seniority. A CFO typically operates at board level with broader strategic scope, whilst a finance director may focus more on operational finance management.
