Breaking Down "Fractional CFO"
Let's break down each part of the term to fully understand what a fractional CFO means:
"Fractional"
A fraction of their time. Instead of working 5 days per week for one company, a fractional executive divides their time among 2-4 clients. Each client gets a "fraction"—perhaps 1-2 days per week.
"CFO"
Chief Financial Officer. The senior executive responsible for financial strategy, reporting, planning, cash flow, fundraising, and ensuring the financial health of the organization.
The Origin of "Fractional"
The term "fractional" was popularized in aviation with "fractional jet ownership"—where multiple owners share a private jet, each owning a fraction. The concept transferred to executive leadership: multiple companies sharing access to senior executive talent.
The Institute of Chartered Accountants recognizes fractional finance leadership as an established model for accessing senior expertise.
Fractional CFO vs Other Terms
| Term | Time Commitment | Duration | Role Type |
|---|---|---|---|
| Fractional CFO | Part-time (1-3 days/week) | Ongoing (months to years) | Strategic leadership |
| Interim CFO | Full-time (5 days/week) | Temporary (3-12 months) | Gap-fill / transition |
| Part-Time CFO | Part-time | Ongoing | Same as fractional |
| Outsourced CFO | Varies | Contract-based | Often includes team |
| Virtual CFO | Remote/part-time | Ongoing | Remote-first fractional |
| Finance Consultant | Project-based | Short-term | Advisory, not ownership |
What Does a Fractional CFO Actually Do?
Financial Strategy
Develop financial plans aligned with business goals. Guide major decisions with financial modeling and analysis.
Cash Flow Management
Monitor and optimize cash flow. Ensure the business has runway and manage working capital effectively.
Financial Reporting
Create meaningful management accounts and dashboards. Translate numbers into insights for decision-making.
Fundraising Support
Lead investor relations, create financial models for funding rounds, and manage due diligence processes.
Finance Team Leadership
Manage and develop the finance function. Hire, train, and mentor finance staff.
Who Uses Fractional CFOs?
Ideal For:
- Scale-ups (£1M-£30M revenue)
- Funded startups (Series A/B)
- SMEs needing strategic finance
- PE portfolio companies
- Companies preparing for exit
Less Suitable For:
- Very early startups (pre-revenue)
- Large enterprises (need full-time)
- Companies needing only bookkeeping
- Heavily regulated sectors (may need full-time)
Cost Comparison
1-2 days per week engagement
Salary + benefits + bonus
Summary: A fractional CFO is a part-time Chief Financial Officer who works with your business 1-3 days per week. The term "fractional" means you get a fraction of their time—and pay a fraction of full-time cost—while still accessing senior financial leadership.