Do any of these sound familiar?
Your accountant keeps your books tidy, but nobody’s turning those numbers into insight that backs your decisions.
You set your pricing on a hunch.
You check your cash flow only when it feels tight, and by then it’s often too late to do much about it.
A full-time finance director could sort all that out for you, but their salary is hard to justify at this stage in your growth, and their workload wouldn’t fill five days a week either.
Many growing businesses hit a similar wall. Bringing in a fractional FD can help close the gap. It can give you access to senior finance expertise on tap, priced against the time your business needs, without the cost of a hiring a permanent FD.
This article explores what a fractional FD does, the signs your business might need one and how Sysum Howard Duggan Accountants (SHD&Co) can support you with it.
What is a fractional FD?
A fractional FD is a senior finance professional who works with your business part-time or on a project basis. They bring the same strategic input as a full-time finance director, fitted around what your business needs and what it can afford at its current stage of growth.
Arrangements can vary from business to business. Some firms bring a fractional FD in for a set day each week. Others agree a fixed number of hours a month, topped up when things get busy. Some bring one in around a specific milestone, such as a funding round, an acquisition or a major system change, then scale their involvement back once the work is done.
A fractional FD fulfils a different role to an accountant or bookkeeper, who records transactions, reconciles accounts and keeps compliance on track. A fractional FD sits above that layer of work, using the numbers your accountant produces to guide pricing, cash flow, hiring and growth decisions. Many SME owners bring one in once their business has outgrown its current finance support and the gaps in oversight start to show, but before the business is ready to fund a full-time hire.
Signs your business might need a fractional FD
If you recognise any of the following signs, it might be time to consider bringing in a fractional FD:
- Cash flow is hard to predict – You know roughly what’s coming in and going out, but forecasting more than a few weeks ahead feels like guesswork. That makes it hard to plan recruitment, stock purchases or investment with any real confidence, and it leaves you reacting to problems once they’ve already arrived.
- Growth has outpaced your systems – The system that worked well enough at £500k turnover starts to creak at £2m. Reports take longer to produce, figures need chasing from different places and by the time the numbers land on your desk, they’re already out of date.
- You make decisions without solid numbers behind them – You make decisions based on instinct, because nobody’s built the model to test your assumptions properly first. While a price rise might feel right, if nobody’s checked what it might do to your margins, it could have a different outcome to what you’re expecting.
- You’re preparing for investment or funding – Investors and lenders expect robust forecasts, clear management accounts and a business owner who can answer detailed questions about their numbers on the spot. Without that groundwork in place, raising finance takes longer, and deals can fall through at the last stage.
- Your bank or an investor has asked a question you couldn’t answer – That moment, more than any other, tends to prompt business owners to bring in senior finance support, because it exposes just how much is riding on financial oversight their business doesn’t have.
- You’re managing everything yourself – Many owners end up doing the finance function in the evenings and at weekends, on top of everything else their business needs from them. It works for a while, but it rarely works forever.
What a fractional FD does
A fractional FD’s work goes well beyond compliance. Their focus sits on the decisions ahead of your business, using the accounts behind it as the evidence base.
They build financial forecasts and budgets, giving you a working model of how your business might perform over the coming months and years, built on assumptions that have been tested against how your business operates.
They produce management accounts that tell you which products or clients are genuinely profitable once every cost is accounted for, where expenses are creeping up unnoticed and how your business’s performance compares with the plan you set out at the start of the year.
They manage your cash flow, tracking what’s coming in and going out in detail and flagging any problems early enough for you to act on them.
They review your pricing and margins, testing whether your prices reflect your true costs and where there’s room to improve profitability without losing customers.
They run scenario planning, modelling what might happen if you take on a big new contract, hire more staff, lose a big client or face a sudden rise in costs, so you can weigh your major decisions with the numbers in front of you.
They also act as a sounding board in board and strategy meetings, bringing a level of financial scrutiny to the table that’s hard to get from anyone else on your team, and asking the questions that keep your plans grounded in what your business can afford.
Fractional FD versus full-time FD
A full-time finance director in the UK typically commands a salary well into six figures once pension, benefits and National Insurance are added on top. For most growing SMEs, that’s a significant fixed cost to carry for a role that might not need five days a week of attention just yet.
A fractional FD gives you the same calibre of expertise, but you pay only for what you use. A day a week, or a set block of hours each month, costs a fraction of a full-time salary, and the arrangement can flex as your circumstances change. You can pay for more hours in your busier months, and scale things back in your quieter ones.
As your turnover grows and your finance function becomes more demanding, you can increase a fractional FD’s involvement gradually, adding days as your business needs them. And when your business reaches the point where a full-time hire makes financial sense, a fractional FD can help you shape that role and support the handover, keeping the transition on your terms and away from a deadline forced by circumstance.
How our fractional FD service works
At Sysum Howard Duggan, our fractional FD service is delivered by chartered accountants who already understand your business, because the same team handles your accounts, tax and compliance work throughout the year. That means no separate relationship to manage, no new adviser to bring up to speed and no gap between your numbers and the strategic advice built on top of them.
We’ll start by getting to know your business properly, looking at how it’s structured, where it’s heading and where the gaps in financial oversight currently sit. From there, we’ll agree the right level of involvement together, whether that’s a regular monthly check-in, dedicated support around a specific project or ongoing input into board meetings and strategic planning.
Our advice is forward-looking. Alongside keeping you compliant, we can help you plan ahead, model decisions before you make them and understand what the numbers mean for where your business is going next. Our team includes chartered accountants and sector specialists, so the advice you get reflects the realities of your industry and stays close to your business as it grows and its needs change.
You’ll always know where your business stands financially and what’s coming next, delivered with the same personal, friendly service you’d expect when you work with Sysum Howard Duggan.
Getting started
If your cash flow feels harder to predict than it should be or you’re making big financial decisions without solid numbers behind them, it’s worth having a conversation with our team. We’ll talk through where your business stands today, what a fractional FD could realistically do for it, and what that support would look like in practice, including how many days or hours it’s likely to need.
There’s no set formula for what fractional FD support should look like. Every business we work with is different, so we’ll build the service around what you need. Get in touch with our team today to find out whether fractional FD support is the right next step for your growing business.