Why Your Fractional CFO Shouldn’t Be Doing Your Accounting Work
If your fractional CFO is handling bank reconciliations, cleaning up your QuickBooks, and categorizing transactions, there’s a good chance you’re overpaying—and underutilizing—a highly valuable resource.
This week, I spoke with a business owner who told me they had everything covered. “We’re working with the ex-CFO of [insert large company], and they’re doing all our finance stuff.” Naturally, I asked, “Are they also managing the accounting?” The answer? “Yes, they’ve got it all taken care of.”
But that’s where the problem begins.
Hiring a fractional CFO should be about strategic value—not just getting the books done. When you bring on a CFO, you’re not just hiring another pair of hands to plug holes in your financial systems. You’re bringing on someone who’s supposed to help you grow, navigate risk, and guide your company toward bigger goals.
Using a CFO for accounting tasks is like delivering DoorDash in a Ferrari. You’ve got the horsepower, but you’re using it for the wrong job.
Strategic Finance ≠ Operational Accounting
Let’s clarify what a fractional CFO is actually good for—especially for early-stage businesses in the $1–10M revenue range.
A fractional CFO should be leading pricing and margin strategy, supporting capital raising, managing investor relationships, building financial models, forecasting demand, developing dashboards, and hosting KPI-focused meetings. Their goal is to help you see around corners and make proactive decisions.
What they should not be doing? Closing the books, filing sales tax, running payroll, or reconciling bank accounts. Those are responsibilities that fall under your accounting team, ideally managed by a Controller.
The key here is alignment. You want the right person in the right seat. Fractional CFOs typically charge $200–$400 per hour. If they’re doing data entry and month-end close tasks, you’re probably burning valuable budget on work that a staff accountant or bookkeeper should handle.
There are some firms that offer CFO-level advice alongside a bookkeeping team. That can work well—but make sure you’re not being billed top-tier CFO rates just for that CFO to train junior staff or clean up reconciliations.
If you’re working under a fixed-fee model, you may get better value. In that setup, the firm manages quality control, and your CFO can stay focused on the big picture, not caught up in small details.
The Hidden Cost of a Misaligned CFO Role
There’s a very real cost to pulling your CFO down into the weeds. Their strategic perspective is limited when they’re stuck reviewing vendor bills or troubleshooting QuickBooks. It creates a vacuum where no one is actually steering the financial strategy of the business.
Here’s another red flag: many CFOs who transition into fractional work haven’t kept up with modern accounting platforms or the latest best practices. That’s not a knock—it’s just the nature of the job. If someone has spent the last ten years building financial models or supporting M&A, they might be far removed from the day-to-day technicals of accounting operations. That’s why you need a complementary team structure—not one person doing it all.
And if your CFO is managing all the financial tasks, who’s holding them accountable? Who’s overseeing the processes and systems that ensure accuracy? You run the risk of blurred lines, where one person is both doing the work and reviewing it. That’s not sustainable.
What a Proper Finance Team Looks Like
To support scale, you need to build the right financial infrastructure. That starts with the following breakdown:
- Bookkeeper or Staff Accountant: Handles transaction entry, reconciliations, accounts payable and receivable, and vendor payments.
- Controller: Owns the accounting process, manages the team, ensures system integration, and is responsible for reporting and audit readiness.
- CFO: Focuses on strategy, capital planning, margin analysis, pricing, and financial clarity.
Here’s how that plays out in practice: The CFO flags a margin drop. The controller digs into the cost of goods sold and realizes that tariff expenses are causing the spike. The bookkeeper then tags the appropriate vendor invoices so everything gets coded correctly moving forward. Everyone stays in their lane—and the business gets better outcomes.
In this setup, 80% of the CFO’s time should be spent on strategy, not on bookkeeping or quality control.
What to Avoid
If you’re thinking about restructuring your finance team, keep this in mind: one person can’t do it all. Not effectively, and certainly not efficiently.
Don’t assume that every CFO has deep accounting expertise. Some come from a finance background—they’re great at modeling and strategic planning but might not be the right person to set up your chart of accounts or manage tax filings. Others come from the accounting side and may lack depth in capital strategy or fundraising.
Also, don’t rush the hiring process just to “get someone in the seat.” Too many businesses prioritize speed over structure. But as the Navy SEALs say, “Slow is smooth, and smooth is fast.” Take your time to design the right team—and you’ll see faster, more sustainable results in the long run.
A Simple Gut Check
Take a look at what your fractional CFO did this week. Write down the last five things they worked on. How many of those tasks were strategic? If it’s fewer than three, it’s time to reset expectations and realign roles.
It’s not just about saving money—it’s about unlocking growth.
Let your CFO be a Ferrari. Put them on the track, not in the drive-thru. That’s how you build a healthier, more profitable business in 2025.
