What is a Fractional CFO?

Is your company ready for a financial point person, but you’re not sure if you can afford a full-time chief financial officer (CFO)? Rather than paying for a full-time employee or going without this much needed position, there is an option in between. A CFO (Chief Financial officer) is a senior executive who is responsible for managing and overseeing the financial wellbeing of a company. A fractional CFO works for a company on a part-time or project basis. Their scope of responsibilities is tailored more to the specific goals of a small business, and they usually take on fewer tasks than a full-time CFO.

Fractional CFO Services

Here are just a few of the duties of a small business fractional CFO:

Should a CFO be a full-time employee or contracted?

A fractional CFO could be hired using full-time equivalent (FTE) hours, or as a contractor. FTE is a unit that measures an employer’s number of full-time employees based on the number of hours worked. As an FTE the CFO would be an employee of the organization, while a contractor remains independent.

Pros/cons of a Full-time CFO Employee

An FTE CFO may command a lower salary than a contractor, because the contractors must provide their own benefits and pay employer payroll taxes. Additionally, a part-time CFO employee may provide greater control of the CFO’s hours, commitment, and adherence to your company structure. However, if a CFO is coming into your business as an employee you will have to pay for taxes, benefits, and associated costs.

There is no need to worry about contracts or how they will impact your business. Compared to a fractional, contracted CFO, an FTE CFO is less scalable. Changing hours or other work parameters will require negotiation.

Pros/cons of a contracted CFO

Hiring a contracted, fractional CFO puts the burden of taxes and benefits on the contractor themselves. You may also find that you save money with a contracted CFO, as you only pay them for the hours you need. Scaling up or down is a lot easier, especially if you set minimum and maximum hours within the contract.

Overall, a contracted fractional CFO generally comes with less hassle. They are there to get the job done, with an outside view of the company which can bring about new insight and better decision making.

What is the breakeven point for FTE vs. Part-time CFO?

There are formulas companies can follow to determine how many full-time employees part-time staff equal to. This is important as part-time workers are usually paid differently, often without the benefits that come with being a full-time worker.

If the average work week for full-time staff is 40 hours, simply divide the part-time employee’s weekly hours by 40. That will give you the full-time equivalent, which you can use to calculate staff. For instance, if you have four employees who work 0.25 FTE, they are equivalent, in work hours, to one full-time person.


However, you also need to multiply the FTE CFO by an expected percentage for payroll taxes (usually 6-8%), contractual bonus (potentially 15-20%), benefits (5-10%), and other benefits or stock incentives (varies). These costs may mean you end up overpaying for a full-time CFO instead of hiring a fractional CFO.

CFO and Controller

What is a controller?

A financial controller is essentially the lead accountant for a business, overseeing and directing financial activities, including financial management, compliance, and accounting and record-keeping operations.  They typically report to a CFO, but in some cases, the responsibilities of the position are combined, especially in smaller companies. While larger businesses can spread financial responsibilities around, small businesses tend to put more tasks on one person’s list.

Pros/cons of a controller

Financial controllers play an important role, reducing the risk of fraud and ensuring regulatory compliance. They are key to keeping financial reports accurate and ensuring the organization’s accounting process can grow along with it. They are certainly a step above a bookkeeper when a company is expanding!


However, sometimes a CFO is a better choice to supplement a controller. A controller may have the financial mind for numbers but lack the ability to report and interpret on those numbers, creating long term strategy. A controller may also carry less weight with stakeholders and potential investors than a CFO.

Controller vs. CFO for startups

What are the startup’s needs?

Even if a startup’s financial needs do not seem that complex, it is important to think about every need, even non-financial. If every employee is needed for core business operations, it can be hard to add financial duties to the workload. Overstretched staff results in problem with accuracy, compliance, and oversight.

Other Types of CFOs

What is an interim CFO?

An interim CFO takes over CFO duties on a short-term or temporary basis. They are expected to be temporary, rather than someone working fewer hours on a longer or indefinite basis. An inter-im CFO works best in a business where they have experience in the industry, with the size of the company, and any relevant regulations.

What is a remote CFO?

A remote CFO handles their roles from outside of the work environment. They are often less expensive than other iterations of CFOs, but companies need the right infrastructure to bring one on board. Remote CFOs are a good fit for organizations willing to implement the technology, who do not need immediate, physical access to a CFO in-house.

What Salary/Benefits Should My Business Expect For…

Fractional CFOs vs. FTE

Fractional CFOs are typically paid by the hour as per their contract. You can expect to pay between $175 to $300 an hour for fractional CFOs depending on your location. Most contracts do not include benefits.

Interim CFOs vs. FTE

Interim CFOs are hired on as a temporary replacement for full-time CFOs. Thus, they may expect benefits depending on the contract. Again, depending on the region, an average pay might be around $100 an hour.

Remote CFOs vs. FTE

A remote CFO may be like a full-time CFO, just working from elsewhere. In this scenario, benefits of some sort are typically an expectation. 

Controller vs. FTE

A controller is a full-time employee, garnering benefits. Their average salary changes depending on job responsibilities and location. One study shows a midpoint of $132,000.

Bottom Line: What’s Right for my Business?

Startups and SMEs

For startups and SMEs it can be a challenge to consider hiring another person when it could be expensive overhead. Hiring a fractional CFO is a good way to test the waters and determine just how much value a CFO can bring to your company, without having to bring someone on board permanently or on a full-time basis.

Large business

A large business is likely to be established enough to pay costs of an in-house CFO (more than any of the alternatives listed above!). Still, a fractional CFO may be helpful to add to the team in times of transition or growth.



Finvisor HQ
48 2nd Street, 4th Floor
San Francisco, CA 94105

This field is for validation purposes and should be left unchanged.
Skip to content