Fractional CFO or an outsourced CFO?
The short answer: in most cases these are the same job under two names, and the market does not agree on a definition for either. Here is what genuinely varies between providers, what to ask instead of trusting the label, and where the two words really do mean different things.
Are they the same thing?
In most cases these are the same job under two names. Every page ranking for this question is written by a firm selling one of them, and they contradict each other flatly: some say fractional is a subset of outsourced, some say outsourced means the whole finance function, some use the words interchangeably. There is no agreed definition to look up, so the label tells you nothing and the only thing that settles it is asking what you are actually buying.
Names in use for roughly this arrangement: Fractional CFO, Outsourced CFO, Virtual CFO, Part-time CFO, Part-time finance director, the older British term and CFO as a Service.
What actually varies, whatever it is called
Ask these instead of trusting the label
- How many days a month does this retainer buy, and what happens if we need more?
- Who exactly will be doing the work, and what was the last company where they personally held the CFO seat?
- What is included and what is billed separately: bookkeeping, payroll, filings, audit support?
- Who wrote the last board pack you were involved in, and can you walk me through it?
- If you left, what happens to us?
What an outsourced CFO actually is
A finance leader provided from outside the company, usually by an accounting or advisory firm, on a monthly retainer. In much of the market it describes the same arrangement as a fractional CFO; in the rest it describes an accounting service with a senior name attached.
What each one owns
| A fractional CFO | An outsourced CFO |
|---|---|
| The seat itself: they are your CFO, for fewer days | Whatever the retainer specifies, which ranges enormously by provider |
| Cash, runway, pricing and the decisions that move either | At the accounting end: the books, the close, compliance and filings |
| The board pack, and the conversation that follows it | At the advisory end: the same work a fractional CFO does |
| Fundraise readiness and surviving financial diligence | Continuity from a firm rather than from one named person |
What neither of them does
Neither is a bookkeeper, though an outsourced package often includes one. If your books are behind, that is the thing to buy first, and buying senior judgement to fix data entry is the most expensive way to do it.
How each one fails
The fractional CFO: Being bought when what the company actually needed was a finance function: one person two days a week cannot also close your month, run payroll and chase debtors.
An outsourced CFO: Being bought when what the company needed was judgement. A retainer that delivers clean management accounts and a monthly call is a good product, and it is not a CFO in the seat.
What they cost, on the same basis
A fractional CFO charges £800 to £1,500 a day, and most engagements run one to three days a week. A monthly retainer, commonly quoted without stating how many days it buys, which is what makes the two hard to compare on price. The monthly and annual arithmetic for the fractional side, against a full-time equivalent, is on the cost page for this seat.
Pick an outsourced CFO when
- You need the whole finance function, not just the seat at the top of it
- Your books, filings and compliance need owning as well as your numbers
- You would rather hold a firm accountable than an individual
We would rather say that plainly than win an engagement that was the wrong shape. Nobody pays us to list on the bench, so there is nothing in it for us either way.
When you want both
Common, and usually the cheapest correct answer: an outsourced or in-house team owns the books, and a fractional CFO owns what the numbers mean. Paying senior rates for bookkeeping, or expecting a bookkeeper to answer the board, are the two ways to get this wrong.
Common questions
Is a fractional CFO cheaper than an outsourced CFO?
On a like-for-like basis it usually is, because you buy the days you need rather than all of them. A fractional CFO runs £800 to £1,500 a day, most often one to three days a week. A monthly retainer, commonly quoted without stating how many days it buys, which is what makes the two hard to compare on price. But cheaper is the wrong question if the work genuinely needs the other one.
When should I pick an outsourced CFO instead?
You need the whole finance function, not just the seat at the top of it Your books, filings and compliance need owning as well as your numbers You would rather hold a firm accountable than an individual
Can I have both?
Common, and usually the cheapest correct answer: an outsourced or in-house team owns the books, and a fractional CFO owns what the numbers mean. Paying senior rates for bookkeeping, or expecting a bookkeeper to answer the board, are the two ways to get this wrong.