Making the CFO Decision: Fractional or Full-Time for Small Businesses

By Brady Whitesel on March 19, 2023
Fractional CFO vs Full Time CFO

Both fractional CFOs and a full-time CFOs are responsible for the financial management and performance of a company, however there are important differences between the two that will impact a business’s decision on which option to choose. What is a Fractional CFO?

Full-Time CFO:


1. Dedicated and consistent support: A full-time CFO is a permanent member of the management team and provides consistent support for the financial management of the business. It is expected that a full-time CFO invest 100% of their professional time managing the financial performance of the company. They often work 60+ hours per week for their company.

2. Access to in-depth expertise: A full-time CFO has a deep understanding of the business they work for and its financial performance, which leads to more strategic decision-making as they work side-by-side with the CEO and executive management team.

3. Better alignment with company culture: A full-time CFO is fully immersed in the company culture and is better able to align with the company’s values and goals.


1. Substantially Higher cost: Hiring a full-time CFO is expensive and may not be feasible for small and growing businesses with limited resources. The salary and benefits for full-time CFOs is often over $200,000 per year.

2. Limited flexibility: A full-time CFO is a permanent member of the management team and may not be able to adapt to changes in the business as quickly as a fractional CFO. Full-time CFOs often have limited exposure to the many ways of managing the financial performance of a company and many full-time CFOs have limited professional networks making it more difficult for them to acquire outside counsel when needed.

3. Overhead costs: In addition to salary and benefits, a full-time CFO may require support staff, office space, and other resources, which add to the overall cost of the role.

Fractional CFO:


1. Cost-effective solution: A fractional CFO provides access to the same expertise as a full-time CFO at a “fraction” of the cost, making it a more affordable option for small and growing businesses.

2. Flexibility: A fractional CFO can be engaged on a project basis or as needed, giving businesses the flexibility to tailor their financial support to their specific needs.

3. Access to a wider pool of expertise: A fractional CFO service typically provides access to a wider pool of experts, including those with specialized skills, who can bring new perspectives to the company. A fractional CFO often works with many businesses in many different industries allowing for best-in-class process to transfer from one industry more easily to another. This can provide a business owner with a unique competitive advantage in the marketplace.


1. Limited consistency: A fractional CFO may not be available as often as a business owner would like, and businesses may need to manage the relationship with multiple experts.

2. Limited alignment with company culture: A fractional CFO may not be as familiar with the company culture and may not be as effective in aligning with the company’s goals and values.

3. Potential for reduced quality of support: A fractional CFO may not have the same depth of knowledge of the business as a full-time CFO and may need to spend more time getting up to speed on the company’s financial performance.

Ultimately, the choice between a full-time and fractional CFO depends on the specific needs of the business. Small and growing businesses with limited resources usually benefit from the cost-effectiveness and flexibility of fractional CFO services, while larger businesses may require the consistency and in-depth expertise of a full-time CFO.

Fractional CFO services work very well for companies with as little as $500,000 of revenue per year, all the way up to $25 million of revenue per year. However, as one would expect, the fractional CFO role changes drastically as the company grows. In smaller revenue companies, the fractional CFO usually is responsible for closing the books monthly as well as providing the financial modeling and strategic planning. In larger companies, the role often switches to management and oversight of inhouse accounting staff and may include board advisory services.

About the Author

Brady Whitesel is a Fractional CFO and is the Managing Partner of SignalCFO. SignalCFO was founded in 2016 and is a leading Fractional CFO firm located in Indianapolis, Indiana. They work with companies across the United States with expertise in SaaS (software as a service), manufacturing, professional services, data science and food service.