Blog | by Rob Young | November 2026
What Does a Fractional Finance Director Do? A Guide for Growing UK Businesses
Rob Young
Plenty of business owners reach a point where the accounts are filed, the VAT is paid and the tax is under control, yet they still cannot answer the questions that actually keep them awake. Can we afford to hire? Why is cash tight when we made a profit? What happens if our biggest customer leaves? Those are finance director questions rather than compliance questions, and a fractional finance director is a way of getting that level of thinking without hiring someone full time.
What is a fractional finance director?
A fractional finance director (or FD) is a senior finance professional who works for your business for a set amount of time each month rather than full time. You get the strategic thinking, the forecasting and the seat at the table, but you pay for the days you need rather than a full salary and all the employment costs that come with it. You may also hear the terms part-time FD, outsourced FD or virtual CFO, and in practice they describe much the same thing.
I do this myself. I am Finance Director at one of our clients, Icebreaker One, a role that started as a standard accountancy relationship and grew from there. That is quite a common route, because the people who already understand your numbers are often best placed to help you decide what to do with them.
How is a finance director different from your accountant?
The easiest way to think about it is direction of travel. A bookkeeper and an accountant spend most of their time making sure the past is recorded correctly and reported to the right people on time. A finance director spends most of their time looking forward, using that information to plan. The best accountants do a bit of both, which is why the lines blur, but the emphasis is different.
| Role/service | Main focus | Typical output |
|---|---|---|
| Bookkeeper | Recording transactions accurately | Up-to-date ledgers, bank reconciliations, VAT figures |
| Accountant | Compliance and reporting on the past | Annual accounts, tax returns, corporation tax |
| Financial controller | Month-end process and internal controls | Monthly close, reporting packs, control checks |
| Finance director | Planning, cashflow and strategy | Forecasts, KPIs, board advice, funding and pricing decisions |
What does a fractional FD actually do day to day?
The work is usually a rhythm rather than a one-off project. Each month there are management accounts to review and explain, KPIs to track and a cashflow forecast to update, followed by a conversation about what the numbers mean for the decisions coming up. Around that sits the occasional bigger piece of work: building a budget, testing the impact of a price rise or a new hire, preparing for a funding conversation or working out how much cash the business can safely take out.
For some of our clients we produce management accounts, help build the KPIs and attend their monthly management board meetings, which means we hear about what is happening in the business as well as the figures. That is the difference between reporting numbers and being genuinely part of the business, and it is the part owners tend to value most.
When is it the right time to bring one in?
There is no magic turnover figure, but certain situations tend to be the trigger. If more than one of these sounds familiar, it is probably time:
- You are profitable on paper but constantly short of cash and cannot explain why.
- You are planning to hire, expand, buy equipment or take on funding and want the numbers tested first.
- Your reports arrive too late to act on, so decisions are made on gut feel.
- You are the only person who understands the numbers, and that is becoming a risk.
- A lender, investor or buyer has asked for forecasts or management information you do not have.
Speed matters more than people expect. Numbers are only useful while they are still current, so for larger companies we can turn management accounts around in as little as 7 days after month end.
What does a fractional FD cost?
It varies enormously depending on who you hire and how much of their time you need, and a full-time FD is a significant salary once employment costs are added, which is exactly why the fractional model exists. Our own fees scale with the complexity of the work and the time it takes rather than with your profit or revenue, and they are fixed and billed monthly, so there is no meter running when you pick up the phone.
How do you choose the right one?
Credentials matter, but the working relationship matters more, because this person will be in your numbers and your decisions every month. A few questions are worth asking before you commit:
- Who will actually do the work, and how often will I speak to them?
- Have they worked with businesses like mine, and can they explain things in simple terms?
- Which systems will they work in, and will they work alongside my existing accountant or replace them?
- How will we measure whether this is worth the money after six months?
One thing an outsourced finance director cannot always do is take on your legal duties. Even where you delegate to an accountant or adviser, company directors remain legally responsible for the company's records, accounts and tax returns, so an FD supports your decisions rather than replacing your responsibility for them.
Frequently Asked Questions.
There is no minimum size, but the value is greatest when decisions are getting bigger or more complicated, such as hiring, borrowing, expanding or managing seasonal cashflow. A very simple business with stable income may only need good bookkeeping and an accountant.
Need help?
We can act as a fractional finance director and join your board or management meetings, with a particular strength in strategy and cashflow. If you would like to talk through whether it would help your business, feel free to contact us via our website and one of the team will come back to you.
Book a free consultation: https://loveyouraccountants.com/contact.
Author
Rob Young
Rob is Managing Director at LYA, supporting ambitious businesses to scale with confidence through clear planning and proactive financial insight.
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