When to hire a full-time CFO

A fractional CFO is a good answer to a particular question: how do we get senior financial leadership without paying for five days a week? For many companies that answer holds for years. For some it stops holding at a specific moment, and it helps to know the signs.

Sign one: finance needs a leader in the room every day

If your finance work is a steady stream of decisions that cannot wait for a scheduled call, the model has run out. This usually happens at around forty people, or when the finance team grows to four or five. Someone has to hire, coach and be present.

A good test: count the times last month someone said "let's wait until Linnea is back". If it happens more than once a week, the company has outgrown the day rate.

Sign two: the board wants a colleague, not an adviser

Early investors accept a part-time finance lead. Later investors often want a CFO who attends every board meeting, speaks for the company and is accountable for the plan. If your next round is led by a fund that asks about the CFO in the first meeting, believe them.

Sign three: the cost has crossed the line

Run the numbers. At a day rate of €1,200, eight days a month for twelve months costs €108,288. A full-time CFO at a €180,000 salary costs €270,000 over the same year once benefits and a recruiting fee are included. At twelve days a month the invoice is €14,400. Past about fifteen days, you are paying for most of a full-time job and a hire starts to give you more for the money.

How to switch without losing months

Do not wait for the day the seat becomes urgent. Start the search about four months before you want the person to begin. Search time is the longest part, and the fractional CFO can run it alongside the work.

Ask the person in the seat now to write the job description. They know what the role really contains, and they know what it does not. Ask them to join the final interviews and to sit with the new hire for the first two weeks.

A clean handover has three parts: a list of open items, the model and where it lives, and an introduction to every person outside the company who relies on the numbers. Done well, it takes about ten days.

What a fractional CFO is still good for

Many companies bring a fractional CFO back later, for a funding round, an acquisition or an audit. The permanent CFO leads, and the part-time one adds hands. That is a healthy arrangement and it is cheaper than a second hire.