The term “fractional CFO” is everywhere these days, but it’s often misused—and this misuse is breaking the industry.
It’s creating confusion for entrepreneurs like you, and even worse, costing you time and money.
Here’s the Problem
Many businesses that need true financial leadership are unknowingly hiring firms that offer only accounting “advisory services”—things like bookkeeping, tax strategy and general business advice—when what they really want is strategic guidance to increase cash flow, manage growth, and make data-driven decisions.
Let’s set the record straight so you feel confident to hire the right financial support for your business.
“Fractional CFO Services” Are Not the Same as “Advisory Services”
Fractional CFO services is one type of advisory service just as wealth management, succession planning and retirement planning are advisory services.
What is a Fractional CFO? A fractional CFO is a highly skilled Finance strategist who partners with your business on a part-time or contract basis to provide executive-level financial guidance.
We help with cash flow management, budgeting, financial projections, strategic business planning, due diligence for mergers and acquisition (M&A) activities, succession planning and more.
What are Advisory Services? Advisory services, which grew out of the accounting and consulting industries, cover a broad range of accounting support—from tax strategy to bookkeeping to audit and the implications of tax law changes on business operations.
Here’s an example of the difference in real terms. “Advisory services” from an accountant’s perspective will deliver weekly or monthly reports.
“Fractional CFO services” will provide insights from those reports and create a strategic plan, based on those insights, for improving your financial situation going forward.
How Did We Get Here?
Both terms grew out of a need in the Accounting & Finance industries for additional revenue streams.
The term Advisory services grew out of the Accounting industry at a time 2015-2020 when there were sweeping tax law changes, lots of M&A activity, a boom in business growth and an emergence of big accounting firms merging with management consulting companies.
Alternatively, Fractional CFO services grew during the dotcom era when many startups needed high level financial support (projections, pitch decks, deal structuring, etc) on a part-time basis.
It also became popularized during the financial recession of 2007 when financial professionals like myself left Wall Street and became free agents to corporations and small businesses alike.
Over the past decade, the term fractional CFO has exploded in popularity, becoming a highly sought after solution for small and medium sized business owners seeking strategic financial guidance to help them grow and scale.
But the term is also being misused to describe accounting roles, causing inconsistent pricing, confusion and ultimately, traumatic experiences for entrepreneurs who are expecting one thing and getting another.
At a certain stage in every business’s life cycle there should be a CPA, a bookkeeper and a fractional CFO on the team guiding the CEO to peak performance.
The Problem with Misuse
Many professionals now claim the “Fractional CFO” title, but true CFO-level expertise involves more than bookkeeping or accounting tasks. This misuse creates three major problems:
- Confusion: While you may think you’re hiring someone to provide regular strategic financial guidance, budgeting/forecasting, projections, and deep insights from your number you get someone with other capabilities that don’t match what you want.That causes not only frustration but results in a traumatic experience that leads the small business owner to be skeptical about hiring anyone else.
- Pricing Discrepancies: Costs range from hundreds to thousands of dollars per month, making it hard to know what you’re really paying for. I know you may want to pay one price to get multiple services but at some point something will suffer.
- Industry Damage: Misuse of the term is eroding trust and making it harder for real fractional CFOs to serve you effectively. Business owners think their CPA should be able to do everything but in fact each person in the accounting/finance field has a purpose and you need more than one expert as your business grows.A Certified Public Accounting (CPA) takes care of tax planning, tax strategy, contends with the IRS & other agencies if there are tax (business tax, sales tax, payroll tax) issues.
A Bookkeeper performs the day to day accounting and financial recording keeping. They may also support payroll, invoicing & billing.
A Fractional CFO, on the other hand, assesses the health of the business and provides strategic financial advice on how the CEO can grow/scale a financially viable business with or without funding so the CEO can exit successfully if they want. These are three different types of expertise. Don’t be duped.
Term Misuse Can Be Costly for Small Business Owners in Several Ways
Wasted Money on the Wrong Services – Business owners may unknowingly pay for bookkeeping or basic accounting under the impression they are receiving high-level financial strategy, leading to misallocated resources.
Poor Financial Decision-Making – Without true CFO-level guidance, businesses may struggle with cash flow management, budgeting, and financial planning, resulting in costly mistakes or missed growth opportunities.
Expensive Course Corrections – When businesses realize they haven’t been getting the right financial leadership, they often need to rework strategies, fix financial errors, or hire a true CFO, costing additional time and money.
Lost Profitability – Without a real fractional CFO to analyze financial trends, pricing models, and cost structures, small businesses risk inefficiencies that directly impact their bottom line.
Difficulty Securing Funding – Investors and lenders require strategic financial planning and solid reporting. Misguided financial management can lead to lost funding opportunities or unfavorable lending terms.
How to Hire a True Fractional CFO
- Check Their Experience: Look for at least 5 years in finance, not just accounting.
- Ask About Their Services: True fractional CFOs provide strategic planning, cash flow management, investor reporting, and more.
- Understand Pricing: Expect to pay 25-50% of the cost of a full-time CFO (~$150K-$250K annually).
At FinCore, we pride ourselves on delivering genuine fractional CFO services. Click to book a Complimentary 30 Minute Financial Strategy Session.
Tricia Taitt is the CEO and Chief Financial Choreographer of FinCore. She holds an M.B.A from The Fuqua School of Business of Duke University, and a BS in Economics with a Finance concentration from The Wharton School at the University of Pennsylvania. For over 20 years, she’s been a finance professional. Half of the time was spent working on Wall Street while the other half was spent in the trenches side by side with small business owners. As a result of working with FinCore, clients have been able to take control of their numbers and feel more confident in their ability to make decisions, while increasing profits by 10% and building a cash stash to invest in growth. Follow Tricia on LinkedIn and Instagram.
If you’re ready to see what our team of CFOs can do for your small business, Schedule a Financial Strategy Session.