Questions to ask your fractional CFO
- Romesh Jeyaseelanayagam
- Jul 19
- 5 min read
You’ve decided to bring in a fractional CFO.
Congratulations. This is one of the best ways to bring senior financial expertise into a growing business without the cost of a full-time hire.
What is a CFO?
A CFO (chief financial officer) is the senior leader responsible for the financial strategy of a company, including:
Managing cash
Controlling costs
Producing accurate reporting
Advising on decisions such as fundraising, pricing, and investment
The role is a step up from a bookkeeper or accountant, who typically focus on records and compliance rather than strategic direction.
In SME businesses, you will also hear the term finance director, or FD.
CFO and FD in SME businesses are used interchangeably. Both describe the same senior financial leadership role, with the title varying more by company convention and size than by difference in responsibility.
What does fractional mean?
Fractional essentially means part-time.
Rather than employing a full-time CFO, which can be a significant cost for a growing business, you can employ one for a set number of days a month or on an hourly basis.
With a fractional CFO, you get the same senior expertise and strategic input, scaled to your business's specific needs.
The appointment of a fractional CFO is the start of a relationship, and like any relationship, the value you get out of it depends on the quality of the conversation.
Too many leaders treat their fractional CFO as a black box where numbers go in and reassurance comes out. That is a wasted opportunity.
The right questions, asked regularly, turn a fractional CFO from a compliance function into a genuine strategic partner.
Here are some questions you should be asking your fractional CFO:
How long will our money last?
Running out of cash or being surprised by how quickly money disappears is one of the most preventable causes of business failure.
Knowing your cash reserves' lifespan under realistic, stress-tested assumptions gives you time to act before a shortfall becomes urgent.
A good fractional CFO will maintain a rolling cash flow forecast based on your standard performance as well as backup plans for bad months, such as a key client leaving or a sale slipping by.
Your fractional CFO will talk you through the assumptions clearly, so the numbers mean something rather than just being figures on a page.
Which metrics predict our future?
Most management accounts look backwards at revenue, costs, and margins from the previous month.
These reports are useful, but limited if you want to influence what happens next rather than just record past performance.
An effective fractional CFO will identify the leading indicators that matter for your specific business, such as:
How many leads turn into customers
How many customers leave each month
The profit made from each group of buyers over time
and then build reporting around them.
Where are we exposed if things go wrong?
Every business carries risk somewhere: in customers, in suppliers, in a single key person, or in a funding source that might dry up.
Understanding these vulnerabilities early means you can address them on your own terms, rather than having them uncovered at an awkward moment, such as by an investor or lender.
A good fractional CFO will recommend mapping out these risks systematically as part of their early work with a business, and revisiting regularly as things change, helping you decide what, if anything, needs to be done.
Are we structured efficiently for tax and for growth?
This area covers a range of operational details, such as:
Getting the corporate setup wrong can be costly, and some mistakes are difficult to unwind once they become embedded.
Tax rules, as well as financial reliefs, shift frequently, most recently regarding dividend rates and pension salary sacrifice.
An effective fractional CFO will keep a close eye on changes that affect you, flag them proactively and review periodically.
What would a fractional CFO do differently if running this business?
It is easy for any leadership team to become attached to the way things are done.
An unbiased, outside perspective can surface improvements that have become invisible from the inside.
A good fractional CFO will offer a rounded perspective, drawing on experience across other businesses to raise constructive challenges where the input is useful, to support better decisions rather than to find fault.
How are we preparing for our next funding round or sale?
The financial discipline that supports a raise or a sale, including clean records, defensible forecasts, and a credible data pack, takes time to build.
Leaving preparation until an opportunity arises often means missing the chance or entering the process at a disadvantage.
A good fractional CFO will recommend building these foundations in the background, well before they are needed, so the business is ready to move quickly when the right moment arrives.
How should we be using the time of our fractional CFO?
Fractional CFO arrangements work best when the scope is clear and reviewed as the business changes.
Without clarity, it is easy to underuse a fractional CFO in the areas where they could add the most value.
A good fractional CFO will periodically review how their time is spent against where the business needs support and suggest adjustments to the balance between reporting, strategy, and ad hoc input as priorities shift.
How The FD Consultant approaches the fractional CFO role
At The FD Consultant, we expect to be asked hard questions, and we expect to ask them back.
A fractional CFO relationship that doesn’t involve constructive challenge in both directions isn't doing its job.
However, the challenge is always gentle, diplomatic, and well-intentioned; we are always on your side.
We work with founders and SME owners to build the financial foundations that support good decisions, such as:
Clear reporting
Honest forecasting
A straight answer when one is needed
Our service includes flagging risks before they become problems, identifying opportunities such as SEIS or EIS for raising capital, and preparing the business for whatever comes next, whether that is a funding round, a sale, or a period of sustained growth.
For a fractional CFO, there is no such thing as too many questions. Dialogue is what strengthens our relationship.
Get more from your fractional CFO
If you already work with a fractional CFO, take the questions above into your next conversation to make the most of their support.
If you are considering bringing an expert in for the first time, the answers you get during the hiring process will tell you a great deal about the partnership ahead.
Get in touch with The FD Consultant to discuss how a fractional CFO relationship built on the right questions could support your business.
Comments