A fractional CFO works with you on a part-time basis, typically a set number of days per month, and takes responsibility for the strategic financial decisions your business needs to make. For ecommerce businesses specifically, that involves several things.
Management accounts are only useful if you understand what they are telling you. Part of the role is explaining what changed, why it changed, and what you should do differently as a result.
Whether you are raising capital, taking out a bank loan, or planning to sell the business, having clean, well-presented financials is the difference between a credible conversation and one that stalls in the first 10 minutes.
It might show up like this:
Costs vary depending on the scope and how many days per month you need. Most UK businesses pay between £1,000 and £3,000 per month for outsourced CFO services. A business at £1M in turnover with one sales channel needs less time than a business at £8M selling across multiple platforms with a team of twelve.
The comparison worth making is against a full-time hire. A senior finance director costs £80,000 to £120,000 per year in salary, before employer National Insurance, pension contributions, and the time taken to recruit. A fractional CFO gives you the same level of expertise at a fraction of that cost, with no employment on-costs and no notice period if your needs change.
For most ecommerce businesses, the monthly cost also needs to be weighed against the cost of not having it. A missed cash flow problem, a stock order placed without a proper forecast behind it, not being able to afford payroll, or a funding round that stalls because the numbers are not presented well all have a cost too, even if it does not appear on an invoice.
