What a Fractional CFO Actually Does in the First 90 Days

Days 1 to 30: understand before changing

Week one: the financial baseline

We start with what exists. The last three years of financial statements, the current year to date, the general ledger, the chart of accounts, the bank and credit facilities, and the tax filings.

The purpose is not to audit. It is to establish whether the numbers can carry weight. The specific questions: is the balance sheet reconciled, is the business on a cash or accrual basis and does that match how it is managed, are there accounts nobody can explain, and does the chart of accounts reflect how the business actually operates or how it operated years ago.

A chart of accounts that has not been revisited in a decade is extremely common and quietly expensive. It produces reports organized around a business that no longer exists, so the owner cannot see the thing they are trying to manage.

Week two: the operating picture

Numbers without operations are uninterpretable. This week is conversations: how work is won, how it is delivered, how it is billed, how it is collected, and who decides what.

The useful output is a map of where cash physically moves and where it gets stuck. In most small businesses there is one bottleneck that explains most of the cash pressure, and it is usually in billing rather than in sales. Work gets delivered and invoiced late. Invoices go out with terms nobody enforces. Collections happen when someone remembers.

Week three: the controls and risk review

Not a formal internal control assessment. A practical look at who can move money, who approves what, whether anyone other than the owner can see the full picture, and what happens if the bookkeeper is unavailable for a month.

This week also covers compliance status: are filings current, are payroll deposits on time, is there anything outstanding with a taxing authority. Compliance problems discovered in month one are manageable. Discovered in month nine, during a financing or a sale, they are not.

Week four: findings and sequence

The month one deliverable is a written assessment: what is reliable, what is not, what the three largest issues are, and what we propose to do in what order.

The sequence is the valuable part. Most businesses have more problems than capacity to fix them, and the work of a first month is deciding which three matter.

Days 31 to 60: build the reliable close

Why the close comes first

Every analytical output depends on numbers that are right and available on a predictable date. A forecast built on an unreliable close is a forecast with an unknown error. A dashboard built on it displays that error more attractively.

So the first construction project is a monthly close that completes on a fixed timetable and produces statements an owner can rely on. That means a documented checklist, reconciliation of every balance sheet account, accruals for the items that routinely get missed, and a defined close date.

The target is a close that lands within a predictable window each month, not a close that is fast for its own sake. Predictable beats quick. A business that closes in twenty days every month can plan around it. A business that closes in six days sometimes and thirty days other times cannot.

The thirteen week cash view

Alongside the close, we build a rolling thirteen week cash forecast. This is usually the single most valuable early deliverable and it is the one owners are least likely to ask for.

Why thirteen weeks: long enough to see a problem with time to act, short enough that the inputs are knowable rather than speculative. It is built from committed items, receivables with realistic collection timing, payables with actual payment timing, payroll dates, debt service, and tax payments.

What it changes is the nature of the conversation. An owner with a thirteen week view stops asking whether they can afford something and starts asking when. The forecast also makes visible the gap between invoice terms and collection reality, which is often where the problem actually lives.

The reporting pack

Month two produces the first version of a monthly pack: the statements, a short written commentary, the cash view, and a small number of operating measures that matter for this specific business.

Short is deliberate. A pack nobody reads is not a reporting system.

Days 61 to 90: from reporting to decisions

Margin analysis at the level decisions are made

Company level gross margin is nearly useless for management because no decision is taken at that level. Margin by service line, by customer type, by location, or by job is where the actionable information sits.

This is frequently the point where the engagement produces an uncomfortable finding. Most businesses with more than one service line have at least one that loses money once properly costed, and it is usually one the owner is attached to. Having the number is the beginning of a decision, not the end of one. Sometimes a loss making line is strategically correct, because it wins the relationship. The point is to decide knowingly.

Pricing and cost structure

With reliable margin data, pricing becomes examinable. Most owner operated businesses in our experience are underpriced on their best work and competitive on their worst, because pricing was set when the business was smaller and has moved with inflation rather than with value.

The forward plan

Only now does an annual budget or a longer forecast become worth building, because it rests on a close that works, a cash view that is maintained, and margin data that is trustworthy.

Owners often want this in week two. Built in week two it is a document, not a tool.

The handover design

By day ninety the engagement should be producing a routine that the business runs with support, rather than a dependency. The close checklist belongs to the bookkeeper. The cash view is updated weekly by someone internal. The pack is produced monthly on a known date.

If every output still depends on the fractional CFO personally at day ninety, the engagement has created a single point of failure rather than removing one.

What this is not

It is not bookkeeping. If the engagement is consumed by transaction entry, either the scope is wrong or the business needs a bookkeeper rather than a CFO. The two roles are complementary and the CFO engagement assumes someone is doing the processing.

It is not an audit. No opinion is issued on the financial statements.

It is not a controller role. Controllers own the accuracy of the accounting. A CFO engagement is about what the business does with the information.

It is not immediate. The most common dissatisfaction we hear about prior engagements is an expectation of transformation in month one. Month one is diagnosis.

How the engagement is scoped and priced

We do not publish a rate card, because the honest drivers are specific:

Hours per month, which depends on the size and complexity of the business and on how much internal finance capability already exists.

The state of the records at the start. A business with a reconciled balance sheet and a functioning close needs far less remediation than one where month one is reconstruction.

Whether a transaction, financing or audit is in progress, which raises the intensity considerably.

Whether the role is ongoing or project based. Some businesses want a permanent part-time CFO. Others want ninety days to fix a specific thing and then a lighter touch.

We scope in writing before starting, with the deliverables and the time commitment defined, and we would rather tell you the engagement is not worth it than sell you one that is not.

Questions we get asked

At what revenue does this make sense?+

Nick Termine, CPA

Revenue is the wrong trigger. The trigger is complexity and consequence: multiple revenue streams, a lender or investor to report to, a transaction in view, or an owner spending time on financial questions instead of on the business. A simple business at higher revenue may not need one. A complex business at lower revenue may.

Can you work with our existing bookkeeper?+

Nick Termine, CPA

Yes, and that is the normal arrangement. The engagement is generally better when there is a competent bookkeeper, because it means the CFO work is actually CFO work.

What if we find something bad?+

Nick Termine, CPA

We tell you immediately, in writing, with the options. Compliance problems get worse with time and cheaper with early disclosure.

How quickly do you see the first improvement?+

Nick Termine, CPA

The thirteen week cash view usually changes decisions within the first month it exists, because it makes a previously invisible constraint visible. Structural improvements take longer.

Where to start

The first conversation is not a sales call. It is an hour spent working out whether this is a CFO problem, a bookkeeping problem or a systems problem, which are three different engagements with three different costs.

TC Advisors CPA is licensed in New Jersey and New York, and both partners came from Big Four practice.

What happens after day 90

The first ninety days establish the machinery. What follows depends on what the diagnosis found, and it usually falls into one of three shapes.

Steady state. The close runs, the pack is produced, the cash view is maintained, and the engagement settles into a lighter monthly rhythm with a quarterly deeper review. This is the common outcome for a stable business that simply lacked financial leadership.

Project driven. A financing, a transaction, a system implementation, or a restructuring. The engagement intensifies around the project and returns to a lighter level afterward.

Build and hand over. The business is growing toward needing a full-time finance hire. The engagement's job becomes designing the role, building the processes that person will inherit, and supporting the hire. A fractional engagement that ends because the business outgrew it is a success, not a loss, and it should be planned for openly.

The mistakes we see in prior engagements

The engagement never left diagnosis. Reports and analysis accumulate and nothing in the business changes. Diagnosis is month one, not months one through twelve.

The CFO became the bookkeeper. Processing crowded out the work that justified the engagement. This usually happens when the business lacked a bookkeeper and nobody said so.

Everything ran through one person. At the end, nothing functions without them. A good engagement reduces key person risk rather than relocating it.

The owner was never told something they did not want to hear. If a fractional CFO has been in place for six months and has not disagreed with the owner about anything material, one of two things is true, and the flattering explanation is rarely the right one.

What we need from you

The engagement works when the owner provides three things. Access, including to the accounts and the bank and the people, without the information being filtered first. Time, which is a recurring hour rather than an open door. And candor about what is not working, including the parts that are embarrassing, because those are usually where the money is.

What the first ninety days cannot do

Setting expectations honestly is part of the engagement, so it is worth naming the limits.

It cannot fix a business model problem. If the economics do not work, better reporting will show you that more clearly and sooner, which is valuable, but the reporting is not the remedy.

It cannot substitute for a bookkeeper. If nobody is processing transactions competently, the first ninety days will be consumed by remediation and the CFO work will not start.

It cannot make a decision the owner does not want to make. The most common stall we see is a margin analysis that clearly indicates a service line should be repriced or retired, sitting unactioned for months because the decision is uncomfortable. The analysis is the easy part.

It cannot compress compliance timelines. If filings are behind, becoming current takes as long as it takes, and discovering that in month one is better than discovering it during a financing.

How to tell whether it is working

Three checks at the ninety day mark, none of which require financial expertise to apply.

Can you answer a question you could not answer before? Specifically: how much cash will I have in eight weeks, and which part of the business actually makes money. If those are still unanswerable, the engagement has not delivered its core output.

Does the close happen on a date you can predict? If the monthly numbers still arrive when they arrive, the foundation is not built.

Have you changed a decision because of something you learned? Reporting that has not changed a single decision is reporting nobody is using.

If all three are no at ninety days, say so directly rather than waiting for month six. A reasonable adviser would rather hear it.

A closing note on sequencing. Everything described here assumes the diagnosis comes before the construction. If an adviser proposes building a budget in week one, ask what it will be built on. The answer determines whether you are getting a tool or a document.