YF Accounting9 min read
A fractional CFO is a senior finance director you hire part time, usually for a day or two a month on a fixed fee, and most owner-managed businesses need one once turnover passes roughly £250,000 to £1 million and the big decisions (hiring, pricing, premises, borrowing) start to outgrow gut feel. At that point you need forecasts before decisions, management accounts that explain themselves, and someone financially senior in the room, without paying a six-figure package for a full-time finance director. Our Fractional CFO service is built on our Growing Business plans from £200 a month, tailored to what your business actually needs.
That is the short answer. The rest of this article explains what a fractional CFO does day to day, what they do not do, the six signs your business has reached the point where one pays for itself, how the cost compares with a full-time hire, and what the first three months look like if you take one on.
What a fractional CFO actually does
Fractional means part time and shared. A fractional CFO (chief financial officer, or finance director if you prefer the British title) does the job a full-time FD would do, but for a fixed number of days a month, and often for several businesses at once. The work falls into six areas.
- Management accounts with commentary. A monthly or quarterly pack showing profit, margin, cash and the handful of numbers that drive your business, with a plain-English note on what moved and why. Not a bank reconciliation, but the story behind it.
- Cash-flow forecasting. A rolling 13-week cash forecast, refreshed every month, so you know in September whether January is going to be tight. This is the single most valuable thing a fractional CFO produces, because profitable businesses still run out of cash.
- Budgets and scenarios. An annual budget to measure the year against, and quick “what if” models when a decision comes up: what happens to cash if you hire two people in March, or raise prices by 8%, or lose your biggest customer.
- Pricing and margin analysis. Which customers, products or services actually make money once you allocate the real costs. Most owners are surprised by the answer at least once.
- Funding and lender support. Preparing the pack a bank, investor or grant body wants to see, sitting in the meeting, and handling due diligence questions so they do not land on your desk at 10pm.
- Board-level input. A senior finance voice at your monthly or quarterly review, challenging the plan, flagging risks early and keeping the compliance side (VAT, payroll, year-end accounts, corporation tax) joined up with the decisions you are making.
The common thread is that every one of these looks forward. Year-end accounts tell you what happened up to twelve months ago. A fractional CFO tells you what is about to happen and what to do about it.
What a fractional CFO is not
It helps to be clear about the boundaries, because the title gets used loosely. A fractional CFO is not a bookkeeper: someone still has to record the transactions, reconcile the bank and chase the invoices, and good CFO work depends on that being done properly and on time. Our bookkeeping and management accounts service covers that layer. It is not the year-end compliance job either: statutory accounts and the CT600 still need filing, and a CFO uses them rather than replaces them. And it is not a full-time finance director. If you need someone at every meeting, managing a finance team of five and available on the hour, you have outgrown fractional and should hire.
For most businesses between a few hundred thousand and a few million in turnover, though, the finance job is a day or two a month of senior thinking sitting on top of reliable bookkeeping. That is precisely the gap a fractional CFO fills.
Six signs your business needs one
There is no turnover figure at which a fractional CFO becomes compulsory. These are the signs we see most often in businesses that benefit from one.
- You are making decisions without a forecast. Taking on staff, signing a lease, buying a van or a machine, or committing to a big order on the basis of the bank balance today rather than a view of the next three to six months.
- Profit and cash tell different stories. The accounts say you made money but the overdraft says otherwise. That gap is usually stock, debtors, VAT or corporation tax timing, and it is exactly what a cash forecast makes visible.
- Your tax bills have started to surprise you. Once profits pass £50,000, corporation tax climbs from the 19% small profits rate through marginal relief towards the 25% main rate at £250,000. Our corporation tax explainer covers the mechanics; the point here is that planning for it a year out is worth real money, and that only happens if someone is looking a year out.
- You are about to borrow, raise money or buy a business. Lenders and investors want a credible forecast, clean management accounts and someone who can answer their questions. Turning up without those costs you either the deal or the terms.
- You do not know which parts of the business make money. Three service lines, forty customers, two locations, and no idea which is carrying the others. Margin analysis changes what you sell and who you sell it to.
- Your accountant only turns up once a year. If the only financial conversation you have is at year end, nine months after the fact, you are running the business on a rear-view mirror. That is not a criticism of the accountant; it is simply a different service.
If two or three of these ring true, you are probably past the point where the cost of a fractional CFO is the question. The question is what the lack of one is already costing you.
Fractional CFO vs full-time finance director vs your accountant
The cost comparison is where the fractional model earns its keep. A full-time finance director is a six-figure package once you add employer National Insurance at 15% on everything above £5,000 a year in 2026/27, pension, benefits and recruitment fees, and most businesses under a few million in turnover simply do not have a full-time job for that person. The table below sets the three options side by side.
| What you get | Year-end accountant | Fractional CFO | Full-time finance director |
|---|---|---|---|
| Statutory accounts and tax returns | Yes | Yes, from the same team | Usually outsourced anyway |
| Monthly management accounts with commentary | Rarely | Yes | Yes |
| Rolling cash-flow forecast | No | Yes, refreshed monthly | Yes |
| Budgets, scenarios and pricing analysis | No | Yes | Yes |
| Lender and investor packs | No | Yes | Yes |
| Time commitment | Once a year | A day or two a month | Five days a week |
| Typical cost | From £50 a month | Fixed monthly fee from £200 | Six-figure package plus 15% employer NI |
| Notice period | None | None, no tie-in | Three to six months |
Two things are worth noting. First, the fractional route is not a cut-down version of a finance director; it is the same seniority for the number of days you actually need. Second, because our fractional CFO work sits on the same team as your bookkeeping, VAT, payroll and year-end accounts, nothing falls between two firms. The person building your forecast is the person who knows your VAT quarter and your corporation tax date.
What a fractional CFO costs
At YF Accounting the service is a fixed monthly fee, quoted in writing after a free call and before any work starts, with no hourly billing and no tie-in. Most engagements are built on our Growing Business plan from £200 a month, which already includes bookkeeping, quarterly MTD VAT returns, monthly payroll, management accounts and a quarterly review call, with the CFO layer (forecasting, scenarios, lender packs, board input) scoped on top according to how much senior time your business needs. A business that wants a monthly forecast and a one-hour review will pay a lot less than one preparing for a funding round, and we will tell you which you are before you commit. Standalone management accounts without the full plan start from £250 a quarter.
What you will not get is a surprise invoice. The fee is agreed up front and includes unlimited support in between the scheduled work, so a quick question in week three does not start a meter running.
What the first three months look like
Month one is about getting the numbers trustworthy. We review the bookkeeping, fix the chart of accounts so the management accounts mean something, and build the first 13-week cash forecast from your real bank, debtor and creditor positions. If you are on Xero or QuickBooks, this is quick; if you are on spreadsheets, it takes a little longer and is usually the moment to move.
Month two produces the first management pack with commentary and a budget for the rest of the year, and we sit down (in person in Manchester or on Zoom) to go through it. Month three is when the rhythm settles: forecast refreshed, pack produced, decisions on the table with numbers next to them. From there the work follows whatever the business needs, whether that is a pricing review, a hire, a lender conversation or simply a steady monthly check that the plan is on track.
If you already have an accountant for the compliance side and want to add the CFO layer on top, that works too. The handover is a single email, as our guide to switching accountants explains, and we can run the whole thing or just the forward-looking part.
Frequently asked questions
What is the difference between a fractional CFO and an accountant?
An accountant’s core job is compliance: accurate year-end accounts, tax returns, VAT and payroll filed correctly and on time, looking back at what happened. A fractional CFO works forward: forecasts, budgets, pricing, funding and the decisions in front of you now. Many businesses need both, and at YF Accounting the same team does both, so the forecast and the tax position are never out of step.
How many hours a month does a fractional CFO work?
Typically the equivalent of a day or two a month, scoped to your business. A steady business wanting a monthly forecast and review needs less; one preparing for a funding round, an acquisition or a rapid hiring plan needs more for a few months and then less again. Because the fee is fixed and there is no tie-in, the level can move up or down as the business changes.
Is my business too small for a fractional CFO?
Possibly, and we will say so on the call. Below roughly £250,000 turnover, with no staff and no borrowing, good bookkeeping plus a quarterly review with your accountant usually gives you everything you need, and our Limited Company plan from £50 a month covers that. The fractional CFO layer starts to pay for itself when there are real decisions to make with real money attached: hiring, premises, pricing, borrowing or investment.
Can a fractional CFO help me get a loan or raise investment?
Yes, and this is one of the most common reasons businesses come to us for it. Lenders and investors want a credible three-year forecast, clean monthly management accounts and someone who can answer detailed questions about the numbers. We build the pack, join the meetings where that helps, and handle the due diligence questions so they do not all land on you.
How do I get started with YF Accounting, and what will it cost?
Book a free call and tell us where the business is and what decisions are coming up. If a fractional CFO is the right fit, we send a written fixed-fee quote, usually built on the Growing Business plan from £200 a month with the senior finance work scoped on top, and a short engagement letter. If it is not the right fit yet, we will tell you what is. Everything the service covers is on our Fractional CFO page, and if you have an existing accountant we handle the handover.
If your business has reached the stage where the numbers need to lead the decisions rather than follow them, a fractional CFO is the proportionate way to get there. YF Accounting works on fixed fees agreed before any work begins: sole traders from £35 a month, limited companies from £50 a month and growing businesses from £200 a month, with one point of contact, Yoni Finke FCCA, and unlimited support included. Book a free call, phone 0161 531 0959, or compare plans on our pricing page, and we will tell you plainly whether you need a fractional CFO yet and what it would look like if you do.
Founder of YF Accounting, a fixed-fee, fully digital accountancy practice in Manchester serving SMEs, sole traders and landlords across the UK. One point of contact, unlimited support, no surprise bills.
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