What a fractional CFO actually does, and when you need one
There's a lot of confusion about what a fractional CFO actually is. Some people think it's just a senior accountant who works part-time. Others assume it's only relevant for businesses raising investment. Neither is quite right.
The difference between the three finance roles
A bookkeeper records what happens: transactions, payments, invoices, reconciliations. They keep the data clean and the books accurate. That's essential. But it's backward-looking by design.
An accountant works with that data to ensure compliance: tax returns, statutory accounts, VAT. They may do some advisory work, though in practice most are stretched too thin to go deep on any one client's commercial situation.
A CFO uses the financial data to help run the business. They're asking different questions: what does our pricing model actually produce at scale? Which part of the business is subsidising another? Can we afford this hire? What does the bank need to see before they'll extend our facility?
When do you need one?
Most founders bring in a fractional CFO when something forces the issue: a fundraise, a period of rapid growth, or a cash crisis. The honest answer is that most businesses at £2m+ revenue would benefit from this kind of thinking earlier than they get it.
The tell-tale signs: your management accounts don't help you make decisions; you're not sure which parts of the business are actually profitable; you're growing but cash is always tight; or you know a fundraise or significant commercial decision is coming and you're not ready for the questions it will bring.
What fractional actually means
Fractional means part-time, typically a few days a month, though it varies by engagement. You get senior-level thinking at a fraction of the cost of a full-time hire. The right fractional CFO should feel like a genuine part of your team - someone who knows your numbers, understands your business model, and can pick up the phone when you're about to make a significant decision.