Fractional vs. full-time CFO: when to switch

Most companies between $2M and $50M in revenue do not need a full-time CFO. A few of them need one badly and have not noticed. The difference rarely shows up in revenue alone. It shows up in how many finance decisions are waiting on one person, how often the board asks questions nobody can answer by Friday, and whether the next twelve months include a raise, an acquisition or a first audit.

Here is how we help founders make the call, what each option typically costs, and how to switch without losing a year of context.

Signals you still fit a fractional CFO

A fractional CFO works a set number of days a month, typically two to four, and owns the forecast, the board pack and the large finance decisions. That model fits when the strategic work is periodic and the base underneath it is solid.

• Your monthly close is reliable and handled by a bookkeeper or controller.

• Finance questions come in bursts around board meetings, budgets and raises, not every day.

• You raise once every 18–24 months, and the next round is at least two quarters away.

• There is one entity, one currency and a simple revenue model.

• The CEO is comfortable owning bank and investor relationships day to day.

If most of these hold, a full-time hire would spend much of the week waiting for work that justifies a senior salary.

Signals it is time for a full-time hire

The switch is usually driven by volume and complexity, not by a revenue threshold. Watch for these:

• Finance decisions queue up between your fractional CFO’s days, and operators start making them without a model.

• You are preparing for a first audit, a debt facility with covenants, or several entities across states or countries.

• Revenue is above roughly $25M–$30M and headcount is growing fast enough that planning becomes weekly work.

• A priced round or an M&A process will run for most of the next year.

• The board wants a finance executive in every meeting and on every investor call.

Two or three of these at once is a strong signal. One on its own can often be handled with more fractional days.

What each option typically costs

The figures below are typical US ranges for companies in this size band. They vary by city, sector and stage, so verify them for your situation.

The full-time figure covers more than salary. A typical base of $250k–$400k comes with a bonus, equity, payroll taxes and benefits, which often add 20–30% on top of base. A retained search commonly costs 20–30% of first-year cash compensation. Add three to six months to find the right person, during which the work still needs doing.

The hybrid path

For many companies between $10M and $30M, the next hire is a controller, not a CFO. A full-time controller owns the close, reconciliations, payroll review, accruals and the audit file. The fractional CFO keeps the forecast, the board pack, lender and investor work, and coaching for the controller.

This split puts daily ownership where the daily work is, and it keeps senior judgment at the cost of a few days a month. It also builds the team a future full-time CFO will inherit, which makes that eventual hire easier to recruit and faster to ramp.

How to switch without losing context

The risk in any transition is that the reasoning behind the numbers leaves with the person who built them. Plan the handover like a project with an owner and an end date.

1. Overlap for four to eight weeks. The incoming CFO should sit in on at least one monthly close and one board cycle alongside the fractional lead.

2. Write down the assumptions. Every driver in the model gets a one-line source and an owner. Undocumented assumptions are the first thing to break after a handover.

3. Hand over relationships directly. Introduce the new CFO to your bank, lenders, auditors and lead investors on joint calls, not by email.

4. Transfer the calendar. The close calendar, board dates, covenant tests and tax deadlines move to the new owner on day one. Tax filings themselves stay with your licensed advisors.

5. Keep a short tail. A few hours a month of advisory access for one or two quarters covers the questions nobody thought to ask.

If you are unsure where you sit, list the finance decisions that waited more than a week last quarter. If that list is short, stay fractional and put the savings into runway. If it is long and growing, start the search now, because a good CFO hire usually takes longer than founders plan for.