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Fractional CFO

Fractional vs Full-Time CFO: Complete Comparison & Decision Guide

Published: January 29, 2026
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You’ve decided you need CFO-level financial leadership. Now you’re facing the next question: fractional or full-time?

The answer isn’t always obvious. A $15M business might thrive with a fractional CFO. A $5M business preparing for rapid growth might need full-time. Revenue matters, but it’s not the only factor.

This guide compares fractional and full-time CFOs across cost, capabilities, commitment, and company fit, then provides a decision framework so you can choose the right option for your situation.

What’s the difference between fractional and full-time CFO?

Fractional CFOs work 10-60 hours monthly on flexible, month-to-month engagements costing $3,000-$15,000/month. They bring multi-industry experience and focus on strategic guidance. Full-time CFOs work 40+ hours weekly as dedicated employees costing $250,000-$500,000+ annually. They develop deep company-specific knowledge and handle both strategic and operational leadership. Fractional suits businesses with $500K-$20M revenue needing expertise without full-time commitment. Full-time makes sense above $20M revenue or when operations require daily CFO involvement.

Key Takeaways

  • Cost difference is 60-80% – Fractional CFOs cost $47K-$190K annually vs $250K-$600K+ for full-time including salary, benefits, and recruiting
  • Commitment flexibility varies dramatically – Fractional engagements are month-to-month and scalable; full-time requires long-term employment commitment
  • Expertise breadth vs depth trade-off – Fractional CFOs bring multi-industry experience; full-time CFOs develop deep company-specific knowledge
  • Revenue threshold is $20M – Below this, fractional typically delivers better value; above this, full-time usually makes sense
  • Transition is common – Many businesses start fractional, upgrade to full-time as they scale past $20M revenue
  • Hybrid approach exists – Some businesses use fractional CFO while building finance team, then hire full-time when ready

Cost Comparison: The Numbers

Cost is often the first consideration, and the difference is substantial.

Full-Time CFO Total Compensation

Year 1 breakdown:

Base salary: $150,000-$400,000 Varies by market (coastal cities higher), company size, and CFO experience. $250K is common for mid-market companies.

Benefits (30% of salary): $45,000-$120,000 Health insurance, 401(k) match, PTO, life insurance, disability coverage.

Recruiting fees: $30,000-$80,000 (one-time) Typically 20-25% of first-year salary. Some companies use internal recruiters or networks, reducing this cost.

Equity compensation: Variable Often 1-3% equity for startup CFOs, less common for established companies. Can represent significant additional cost.

Total Year 1: $250,000-$600,000+

Ongoing years: $195,000-$520,000 (no recruiting fee, but salary increases)

This assumes you find the right person on the first try. Failed hires cost more in severance, lost productivity, and re-recruiting.

Fractional CFO Total Cost

Year 1 breakdown:

CFO assessment: $5,000-$10,000 (one-time) Initial engagement to analyze your situation and build roadmap.

Monthly retainer: $3,500-$15,000/month Depends on hours needed and business complexity.

Occasional project work: Variable Fundraising support ($5K-$20K), M&A advisory ($15K-$35K), system implementation ($8K-$20K).

Total Year 1: $47,000-$190,000 For most businesses: $60,000-$120,000 annually.

Ongoing years: Similar, though some businesses reduce hours as infrastructure matures.

Cost Savings Calculation

Take a mid-market example:

  • Full-time CFO: $275K salary + $82K benefits + $60K recruiting = $417K Year 1
  • Fractional CFO: $8K assessment + $84K retainer ($7K/month) = $92K Year 1

Savings: $325K (78% lower cost)

Even comparing fractional CFO to the low end of full-time salary:

  • Full-time CFO: $150K salary + $45K benefits + $30K recruiting = $225K Year 1
  • Fractional CFO: $92K Year 1

Savings: $133K (59% lower cost)

For most businesses under $20M revenue, this cost difference is significant. The question becomes: does full-time deliver enough additional value to justify 3-5x higher cost?

For detailed pricing analysis, read: Fractional CFO Cost & ROI Analysis

Capability Comparison: What Each Provides

Cost matters, but capability matters more. Let’s compare what you actually get.

Strategic Financial Leadership (Both Provide)

Both fractional and full-time CFOs handle:

  • Financial planning and forecasting
  • Budget development and variance analysis
  • Cash flow management and optimization
  • KPI development and tracking
  • Strategic guidance on major decisions
  • Board and investor reporting
  • Scenario modeling for growth or changes

These core CFO functions are similar whether fractional or full-time. A good fractional CFO delivers the same strategic quality as full-time at this level.

Operational Financial Management (Advantage: Full-Time)

Full-time CFOs typically own:

  • Day-to-day finance team management
  • Accounting close process oversight
  • AR/AP troubleshooting and vendor relationships
  • Immediate response to urgent financial questions
  • Real-time crisis management
  • Ongoing system maintenance and optimization

Fractional CFOs can handle these, but with limitations. They’re not on-site daily to manage the team or handle immediate issues. If you need 40+ hours weekly of operational financial management, full-time makes more sense.

Multi-Industry Pattern Recognition (Advantage: Fractional)

Fractional CFOs work with multiple companies simultaneously. This creates advantages:

  • See what works across different business models
  • Bring best practices from other industries
  • Pattern recognition from solving similar problems elsewhere
  • Broader perspective on financial strategies

Full-time CFOs develop deep company-specific knowledge but narrower recent experience. They know your business intimately but haven’t seen what your competitors or analogous businesses are doing.

Specialized Expertise Access (Advantage: Fractional)

Many fractional CFO firms (including SDO CPA) integrate additional expertise:

Full-time CFOs can bring specialization too, but you’re limited to one person’s expertise. Fractional arrangements often provide access to broader team resources.

Company Knowledge Depth (Advantage: Full-Time)

Full-time CFOs are there every day. They know:

  • Every employee and their role in the business
  • Historical context for every decision
  • Subtle operational dynamics
  • Informal relationships and power structures
  • Unwritten rules and cultural factors

Fractional CFOs learn your business well, but they’re not living it 40+ hours weekly. For businesses where deep institutional knowledge drives financial strategy, full-time has advantage.

Commitment & Flexibility Comparison

How you engage matters as much as who you engage.

Hiring & Onboarding

Full-Time CFO:

  • Recruiting process: 2-6 months to find right candidate
  • Interview cycles, reference checks, offer negotiation
  • Ramp-up time: 3-6 months to become fully productive
  • Total time to value: 5-12 months from decision to full contribution

Fractional CFO:

  • Selection process: 1-3 weeks to choose provider
  • CFO assessment: 2-3 weeks
  • Immediate value: Strategic insights start in first month
  • Total time to value: 1-2 months from decision to contribution

If you need strategic guidance now, waiting 6-12 months for full-time hire to be productive is expensive.

Commitment Length

Full-Time CFO:

  • Employment relationship (typically at-will, but carries implied commitment)
  • Termination is disruptive and expensive (severance, morale, recruiting replacement)
  • Plan for minimum 2-3 year relationship to justify recruiting and onboarding investment

Fractional CFO:

  • Month-to-month engagements (though most last 1-3+ years)
  • Can scale hours up or down as needs change
  • Can pause or end with minimal disruption
  • No severance obligations or recruiting to replace

Flexibility matters when business needs change quickly. Fast growth might require more hours. Economic downturn might require cost reduction. Fractional adapts more easily.

Scaling the Relationship

Full-Time CFO:

  • Fixed 40+ hours weekly (can’t easily reduce without termination)
  • Can increase scope but not hours (they’re already full-time)
  • Scaling up requires hiring additional finance team, not more CFO time

Fractional CFO:

  • Start at 10-20 hours monthly, scale to 40+ as needed
  • Reduce hours if needs decrease or budget tightens
  • Increase hours for major projects (fundraising, M&A, rapid growth)
  • Eventually transition to full-time hire when ready

Many businesses use fractional CFOs as bridge to full-time. Start with 20 hours monthly. Scale to 40+ hours as you approach $20M revenue. When the business justifies full-time cost, the fractional CFO often helps recruit and onboard their replacement.

Company Fit Comparison

Different businesses need different CFO models.

Revenue-Based Guidelines

Under $500K: Neither makes sense yet Focus on solid bookkeeping and annual tax planning.

$500K-$2M: Fractional (10-20 hours monthly) Strategic guidance on key decisions. Building financial infrastructure. Establishing KPI tracking.

$2M-$10M: Fractional (20-40 hours monthly) Active involvement in planning and forecasting. Regular strategic sessions. Board reporting. System optimization.

$10M-$20M: Fractional (30-50 hours monthly) or Full-Time Depends on complexity and growth trajectory. Many businesses operate successfully with fractional at this stage.

$20M+: Full-Time (40+ hours weekly) Most businesses need dedicated CFO presence at this scale.

Complexity-Based Considerations

Revenue isn’t the only factor. Complexity matters too.

Fractional Makes Sense When:

  • Single entity with straightforward operations
  • Remote/distributed team comfortable with virtual meetings
  • Strategic decisions happen monthly or quarterly, not daily
  • Finance team (if you have one) is small (1-3 people)
  • Industry is relatively standard (professional services, SaaS)

Full-Time Makes Sense When:

  • Multi-entity structures requiring constant coordination
  • Heavily regulated industry needing daily compliance oversight
  • Managing large finance team (5+ people)
  • High-frequency strategic decisions requiring immediate CFO input
  • Complex capital structure (multiple investor classes, debt covenants)

Growth Stage Considerations

Startup (Pre-revenue to $2M): Fractional. You need expertise but can’t justify full-time cost. Many startups wait too long and make expensive mistakes. Fractional CFO provides strategic guidance during critical early decisions.

Growth ($2M-$20M): Fractional, scaling hours as you grow. Focus on building systems, forecasting, and strategic guidance. Transition to full-time as you approach $20M if operations warrant it.

Scale ($20M+): Full-time. You need dedicated leadership managing finance team, handling complex operations, and providing real-time strategic guidance.

Mature/Stable: Depends on complexity. Some mature businesses operate efficiently with fractional CFO providing strategic oversight while finance team handles operations.

Decision Framework

Use this framework to determine which option fits your situation.

Step 1: Capability Requirements Check

Ask yourself:

Do we need 40+ hours weekly of financial leadership?

  • Yes → Full-time likely makes sense
  • No → Fractional probably sufficient

Do we need same-day response to urgent financial questions?

  • Yes → Full-time provides this better
  • No → Fractional scheduled touchpoints work fine

Do we have a finance team that needs daily management?

  • Yes (5+ people) → Full-time
  • No or small team (1-3 people) → Fractional can oversee

Are our strategic decisions weekly or daily vs monthly or quarterly?

  • Weekly/daily → Full-time better suited
  • Monthly/quarterly → Fractional works well

Score: If you answered “Yes” to 3+ questions, lean toward full-time.

Step 2: Budget Reality Check

Calculate what you can actually afford:

Can we afford $250K-$600K annually for full-time CFO?

If no, decision is easy: Start with fractional. No point considering full-time if budget doesn’t support it.

If yes, next question:

Would spending $250K+ on full-time CFO deliver significantly more value than investing that same money in fractional CFO ($80K-$120K) plus other strategic priorities?

The opportunity cost matters. Sometimes $250K in full-time CFO makes sense. Sometimes $100K in fractional CFO plus $150K in marketing, product development, or sales delivers more business value.

Step 3: Timeline Assessment

Do we need strategic financial guidance in next 30-60 days?

If yes: Fractional is only realistic option. Recruiting and onboarding full-time CFO takes 5-12 months.

Can we wait 6-12 months for full-time CFO to be fully productive?

If no: Start with fractional. Can always transition to full-time later.

If yes and budget supports it: Consider going straight to full-time if your situation clearly needs it.

Step 4: Future Vision

In 2-3 years, do we expect to:

  • Be above $20M revenue → Plan for eventual full-time, but fractional can bridge
  • Need to manage 5+ person finance team → Will likely need full-time
  • Remain under $20M with current complexity → Fractional probably sufficient long-term

Many businesses start fractional with plan to upgrade to full-time as they scale. This is common and works well. The fractional CFO builds infrastructure and can help recruit their full-time replacement when you’re ready.

The Hybrid Approach

Some businesses use both fractional and full-time at different stages or simultaneously.

Fractional → Full-Time Transition

Most common pattern:

Phase 1 ($2M-$10M): Fractional CFO 20-40 hours monthly

  • Build financial infrastructure
  • Establish KPI tracking and reporting
  • Guide major decisions
  • Prepare for scaling

Phase 2 ($10M-$20M): Fractional CFO 40-60 hours monthly

  • More frequent involvement
  • Building finance team (hire controller, senior accountant)
  • System scaling and optimization
  • Strategic planning for next phase

Phase 3 ($20M+): Transition to full-time CFO

  • Fractional CFO helps recruit replacement
  • Transitional overlap (fractional stays 1-2 quarters during onboarding)
  • Clean handoff of systems, relationships, strategic context

This path manages risk well. You don’t overpay for full-time before you need it, but you’re building toward full-time when the business justifies it.

Fractional + Full-Time Simultaneously

Less common but works for specific situations:

Full-time CFO + Fractional Tax/Advisory CFO: Some businesses hire full-time CFO for operations and daily management, then use fractional CFO from firms like SDO CPA for integrated tax and financial planning.

This separates operational management (full-time) from specialized strategic guidance (fractional).

Full-time CFO + Fractional Specialist CFO: Company has full-time CFO but needs specialized expertise for specific project (fundraising, M&A, international expansion). Brings in fractional CFO with specific experience for the project duration.

Common Mistakes to Avoid

Hiring Full-Time Too Early

Hiring full-time CFO at $5M revenue because “that’s what real companies do” wastes money. Fractional delivers same strategic value at this stage for fraction of cost.

Better approach: Use fractional until revenue and complexity clearly justify 40+ hours weekly of dedicated CFO focus.

Staying Fractional Too Long

Some businesses cross $20M revenue with complex operations but stick with fractional CFO because “it’s worked so far.” The CFO is overloaded, response times slow, and strategic guidance suffers.

Better approach: Plan the transition. When you approach $15M-$20M, start discussing upgrade path with your fractional CFO.

Choosing Based on Cost Alone

“Full-time is expensive, so fractional is better” ignores capability and fit. If you genuinely need 40+ hours weekly of CFO presence, trying to do it with 20 hours fractional creates problems.

Better approach: Assess actual needs, then choose model that fits. Sometimes paying more for full-time is right answer.

Expecting Fractional CFO to Manage Daily Operations

Engaging fractional CFO for 15 hours monthly but expecting them to manage 3-person finance team, handle daily vendor issues, and respond to questions within an hour creates frustration.

Better approach: Match expectations to engagement level. Fractional provides strategic guidance and periodic operational oversight, not daily management.

Making Your Decision

Here’s how to think through your specific situation.

You should hire fractional CFO if: 
✅ Revenue between $500K-$20M
✅ Need strategic guidance but not 40+ hours weekly
✅ Want flexibility to scale hours up or down
✅ Value multi-industry experience and pattern recognition
✅ Can’t justify or don’t want to commit to $250K+ annually
✅ Need strategic guidance quickly (can’t wait 6-12 months)

You should hire full-time CFO if: 
✅ Revenue above $20M or complex operations requiring daily oversight
✅ Need to manage finance team of 5+ people
✅ Require same-day response to financial questions and issues
✅ Operations demand 40+ hours weekly of financial leadership
✅ Budget supports $250K-$600K annually
✅ Investors or board require full-time CFO on executive team

You should consider hybrid approach if: 
✅ Currently under $20M but planning aggressive growth
✅ Need specialized expertise full-time CFO lacks
✅ Transitioning from fractional to full-time over 12-24 months
✅ Want integrated tax and financial planning with operational CFO

Ready to discuss which CFO model fits your business? Schedule a consultation to analyze your situation.

For more on CFO services and financial leadership:

About SDO CPA: We provide fractional CFO services integrated with tax advisory. Most businesses start with fractional engagement, scaling hours as they grow. When you’re ready to transition to full-time CFO, we help recruit and onboard your replacement. Our integrated tax and financial planning approach delivers value fractional-only or tax-only providers can’t match.

Schedule a consultation to discuss whether fractional or full-time CFO makes sense for your business.

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