| name | fractional-cfo-playbook |
| description | Complete operational playbook for Fractional CFO engagements. Covers client onboarding financial assessment, monthly close cadence, board-ready reporting packages, cash flow management, strategic financial advisory, and engagement scope templates. Use when setting up or running a Fractional CFO service, onboarding a new client, preparing monthly CFO deliverables, or advising on financial strategy as an outsourced finance executive. NOT for: building financial models from scratch (use startup-financial-model), bookkeeping or transaction recording (use qbo-automation), tax filing preparation (PTIN-required service), or one-time financial analysis without an ongoing advisory context.
|
| version | 1.0.0 |
| author | PrecisionLedger |
| tags | ["fractional-cfo","advisory","finance","reporting","strategy","client-management"] |
Fractional CFO Playbook
The complete operating guide for running Fractional CFO engagements — from first call to ongoing
monthly value delivery. This skill encodes PrecisionLedger's methodology for outsourced finance
executive services.
When to Use This Skill
Trigger phrases:
- "Set up fractional CFO engagement for [client]"
- "What should I deliver as fractional CFO this month?"
- "Prepare the monthly CFO package for [client]"
- "New fractional CFO client — what do we need?"
- "Client wants board-ready financials"
- "CFO advisory scope for [stage/industry]"
- "Cash flow is tight — what does the CFO do?"
NOT for:
- Building a full 3-statement model from scratch → use
startup-financial-model
- Bookkeeping, reconciliation, or data entry → use
qbo-automation
- Tax return preparation or filings → PTIN-required, escalate to Irfan
- One-time financial analysis without CFO context → use
financial-analysis-agent
- Cap table and equity management → use
cap-table-manager
Engagement Tiers
Define scope before starting. Three standard tiers:
| Tier | Hours/Month | Deliverables | Price Range | Best For |
|---|
| Starter | 5–8 hrs | Monthly close review, cash flow report, 1 strategy call | $1,500–$2,500/mo | Pre-revenue to $500K ARR |
| Growth | 12–20 hrs | Full reporting package, KPI dashboard, board prep, 2 calls | $3,500–$6,000/mo | $500K–$5M ARR |
| Executive | 20–40 hrs | All of Growth + fundraising support, audit prep, team mgmt | $6,000–$15,000/mo | $5M+ ARR or fundraising |
Phase 1: Client Onboarding (Week 1–2)
Financial Assessment Checklist
□ ACCOUNTING SYSTEMS
□ Access to QBO / Xero / NetSuite granted
□ Chart of accounts reviewed — gaps or misclassifications noted
□ Bank feeds connected and reconciled YTD
□ Historical period reviewed (12–24 months minimum)
□ FINANCIAL HEALTH SNAPSHOT
□ Trailing 12-month P&L reviewed
□ Balance sheet reviewed — any red flags?
□ Cash flow statement reviewed (or reconstructed if missing)
□ AR aging report pulled — any collection issues?
□ AP aging report pulled — any payables over 60 days?
□ COMPLIANCE & STRUCTURE
□ Entity structure confirmed (LLC, C-corp, S-corp?)
□ Tax returns reviewed (last 2 years if available)
□ Active contracts list obtained (leases, debt, subscriptions)
□ Payroll provider confirmed (Gusto, ADP, etc.)
□ Bank accounts and signers list obtained
□ METRICS & BENCHMARKS
□ Gross margin calculated and benchmarked to industry
□ Burn rate established (if pre-profit)
□ Revenue concentration — top 5 clients as % of revenue?
□ Key financial KPIs identified and baseline set
Onboarding Output: Financial Diagnostic Report
Produce a 1-page diagnostic for the client:
FINANCIAL DIAGNOSTIC SUMMARY
Client: [Name] | Date: [Date] | Prepared by: PrecisionLedger / Sam Ledger
FINANCIAL HEALTH SCORE: [Red/Yellow/Green per category]
Category Status Notes
────────────────────────────────────────────────
Cash Position 🟡 Yellow $180K — 4 months runway at current burn
Revenue 🟢 Green $42K MRR, growing 8% MoM
Gross Margin 🔴 Red 38% — below SaaS benchmark of 60–70%
AR Aging 🟡 Yellow $28K over 60 days — 3 accounts to address
AP/Payables 🟢 Green Current, no overdue
Bookkeeping 🟡 Yellow 2 months behind — catching up underway
Compliance 🟢 Green Tax returns current, payroll compliant
TOP 3 PRIORITIES THIS QUARTER:
1. Improve gross margin: audit COGS, renegotiate vendor contracts
2. Accelerate AR collections: implement net-30 enforcement + follow-up workflow
3. Extend runway: reduce discretionary spend by ~$15K/month
UPCOMING DEADLINES:
• March 15 — Q4 estimated tax payment
• April 15 — Annual tax filing or extension
• May 1 — Lease renewal decision required
Phase 2: Monthly Close Cadence
Close Calendar (Standard Timeline)
Day 1–3 (after month end):
□ Bank reconciliation completed for all accounts
□ Credit card transactions categorized
□ Payroll entries posted and reconciled
Day 4–7:
□ Revenue recognized per schedule
□ Prepaid expense amortization entries posted
□ Accounts receivable invoices confirmed sent
□ Accruals posted (liabilities incurred but not invoiced)
Day 8–10:
□ Unadjusted trial balance reviewed
□ Intercompany eliminations (if applicable)
□ Depreciation/amortization posted
Day 11–15:
□ Final trial balance locked
□ Financial statements drafted
□ Flux analysis completed (month-over-month variance review)
□ CFO package assembled and reviewed
Day 15–20:
□ CFO package delivered to client
□ Monthly strategy call scheduled
□ Prior month action items reviewed
Month-End Flux Analysis
Review every line item variance > 10% or > $5K:
FLUX ANALYSIS TEMPLATE
Account Prior Mo Current Mo $ Change % Change Explanation
────────────────────────────────────────────────────────────────────────────────
Revenue $95,000 $103,000 +$8,000 +8.4% New client Jan 15
COGS $32,000 $39,000 +$7,000 +21.9% ⚠️ Investigate
Payroll $48,000 $53,000 +$5,000 +10.4% New hire Feb 1
Software Tools $4,200 $6,800 +$2,600 +61.9% ⚠️ New subscriptions
Flag any unexplained variance > 15% for discussion on the monthly call.
Phase 3: Monthly CFO Package
Standard Deliverables
Every month, deliver a client-ready package containing:
1. Executive Summary (1 page)
[CLIENT NAME] — MONTHLY CFO BRIEF
Month: [Month Year] | Prepared: [Date]
HEADLINE NUMBERS
Revenue: $103,000 (+8.4% vs prior month)
Gross Profit: $64,000 (62% margin — on target)
Net Income: ($12,000) (investing in growth)
Cash Balance: $285,000 (6.2 months runway)
WINS THIS MONTH
• Closed largest deal to date — $12K MRR contract
• COGS margin improved 3 points after AWS renegotiation
• Collected $18K of aged AR
CONCERNS / WATCH ITEMS
• Software spend up 62% — conducting audit next week
• Two invoices 45+ days overdue — escalating collections
• Runway tightening — fundraise timeline decision needed by Q2
ACTION ITEMS FOR NEXT MONTH
□ Software audit — identify and cancel unused tools [CFO]
□ Collections call on Acme Corp $8,200 invoice [Ops]
□ Series A readiness checklist review [Founder + CFO]
2. Financial Statements (3 pages)
- Income Statement: Month + YTD, vs. prior month, vs. budget
- Balance Sheet: Current month vs. prior month
- Cash Flow Statement: Simplified operating/investing/financing
3. KPI Dashboard
METRIC CURRENT PRIOR MO TARGET STATUS
──────────────────────────────────────────────────────────────
MRR $103,000 $95,000 $100,000 🟢 Ahead
MRR Growth (MoM) 8.4% 6.2% 7% 🟢 On Track
Gross Margin 62% 58% 65% 🟡 Improving
Customer Count 47 43 50 🟡 Close
Cash Runway (months) 6.2 7.1 6+ 🟡 Watch
AR Days Outstanding 38 days 31 days 30 days 🟡 Watch
Burn Rate (net) $12,000 $8,000 <$15,000 🟢 OK
Payroll as % Rev 51% 50% <55% 🟢 OK
4. Cash Flow Forecast (13-week)
13-WEEK CASH FLOW FORECAST
Week Start Cash Inflows Outflows End Cash Notes
─────────────────────────────────────────────────────────────
Wk 1 $285,000 $35,000 $42,000 $278,000 Payroll Fri
Wk 2 $278,000 $18,000 $8,000 $288,000 AR collect
Wk 3 $288,000 $22,000 $15,000 $295,000
...
Wk 13 $XXX,000 ... ... $XXX,000 Projected
Phase 4: Strategic Advisory Functions
Cash Flow Management
Weekly cash flow discipline:
1. Monitor bank balance every Monday
2. Review AP due this week — approve payment run
3. Flag any AR 30+ days overdue for follow-up
4. Update 13-week forecast if assumptions change
5. Escalate if projected cash < 3 months runway
Cash flow levers (when runway is tight):
ACCELERATE INFLOWS:
□ Offer early payment discount (2/10 net 30) for key AR
□ Move to upfront/annual billing for new clients
□ Collect deposits on new projects
□ Line of credit draw if available
DEFER OUTFLOWS:
□ Negotiate extended terms with vendors (net 60–90)
□ Defer non-critical hiring 30–60 days
□ Pause discretionary spend categories
□ Renegotiate SaaS contracts to annual prepay for discount
BRIDGE OPTIONS:
□ Revenue-based financing (Clearco, Pipe, Arc)
□ SBIC / SBA loan for established businesses
□ Convertible note bridge from existing investors
□ Founder personal bridge (document properly)
Fundraising Support
When a client is raising capital:
FUNDRAISING READINESS CHECKLIST (CFO Role)
□ FINANCIAL DATA ROOM
□ 3 years historical financials (audited if available)
□ Current YTD financials (within 30 days)
□ 3-year financial model (base/bear/bull)
□ Unit economics summary (LTV, CAC, payback period)
□ Revenue cohort analysis
□ Cap table (current + pro forma post-raise)
□ METRICS PACKAGE
□ MRR/ARR waterfall (12 months)
□ Gross margin trend
□ Burn and runway calculation
□ Net Revenue Retention
□ Customer count and churn
□ DILIGENCE SUPPORT
□ Bank statements (12–24 months)
□ Payroll records
□ Material contracts list
□ IP and asset register
□ Outstanding liabilities schedule
□ INVESTOR NARRATIVE
□ Financial story: how does the business make money?
□ Why the numbers look the way they do
□ What this raise funds and for how long
□ Key milestones unlocked by this capital
Board Meeting Preparation
Monthly or quarterly board package:
BOARD PACKAGE STRUCTURE
1. EXECUTIVE SUMMARY (1 page)
- Revenue, growth, margin, cash — vs. prior period and budget
- Top 3 wins, top 3 challenges
2. FINANCIAL STATEMENTS (3 pages)
- P&L with budget variance column
- Balance sheet
- Cash flow summary
3. KPI SCORECARD (1 page)
- All agreed board-level KPIs in one table
- Red/Yellow/Green status
4. BUDGET VS. ACTUAL (1 page)
- Month and YTD variance
- Explanation for significant variances
5. UPDATED FORECAST (1 page)
- Revised full-year projection
- Key assumption changes since last board meeting
6. APPENDIX
- Department-level P&L breakdowns
- Headcount report
- Pipeline/bookings summary (if available from sales)
Engagement Management
Scope of Work Template
FRACTIONAL CFO ENGAGEMENT — SCOPE OF WORK
Client: [Client Name]
Effective Date: [Date]
Tier: Growth ($4,500/month, 15 hours/month)
MONTHLY DELIVERABLES:
1. Monthly financial close oversight (Days 1–15)
2. Financial statements (P&L, Balance Sheet, Cash Flow)
3. KPI dashboard update
4. 13-week cash flow forecast
5. Monthly CFO brief (executive summary)
6. Two 60-minute strategy calls per month
QUARTERLY DELIVERABLES:
7. Updated 12-month financial model
8. Board package preparation
9. Quarterly business review presentation
ANNUAL DELIVERABLES:
10. Annual budget and operating plan
11. Year-end close support and audit readiness
12. Annual financial strategy review
OUT OF SCOPE (separate engagement or referral):
• Tax return preparation and filing
• Bookkeeping and daily transaction recording
• Payroll processing
• Legal or HR services
• Audit or attest services
COMMUNICATION:
• Primary contact: [Name]
• Response SLA: 24 hours (business days)
• Emergency escalation: [method]
• Monthly call: [recurring time]
FEES:
• Monthly retainer: $4,500 (billed 1st of month)
• Overage: $250/hour above 15 hours (pre-approved)
• Out-of-pocket expenses billed at cost with receipts
Client Health Scorecard
Track engagement health monthly:
CLIENT: [Name] | MONTH: [Month]
Relationship Health
□ Monthly call completed? Y/N
□ Deliverables on time? Y/N
□ Client responsive to requests? Y/N
□ Open action items > 30 days old? Y/N
Financial Health Indicators
□ Bookkeeping current? Y/N
□ Cash > 3 months runway? Y/N
□ No undisclosed liabilities? Y/N
□ Compliance deadlines on track? Y/N
Engagement Risk
□ Scope creep this month? Y/N
□ Hours within budget? Y/N
□ Any relationship concerns? Y/N
OVERALL STATUS: 🟢 Healthy / 🟡 Watch / 🔴 Escalate
Industry-Specific Benchmarks
SaaS
Gross Margin: 65–80% (below 60% = cost problem)
S&M as % Revenue: 20–40% (early stage) / 15–25% (mature)
R&D as % Revenue: 15–25%
G&A as % Revenue: 8–15%
Rule of 40: ≥40 (Growth % + EBITDA Margin %)
NRR (Net Rev Retention): >100% excellent, 80–100% ok, <80% problem
LTV:CAC: ≥3:1 minimum, 5:1+ healthy
Professional Services / Consulting
Gross Margin: 50–70% (revenue minus direct labor)
Utilization Rate: 65–75% (billable hours / available hours)
Revenue per Employee: $150K–$350K (varies by specialty)
Client Concentration: No single client >25% of revenue
AR Days: <35 days ideal
E-commerce / Retail
Gross Margin: 30–60% (depends on category)
Inventory Turnover: 6–12x per year
CAC:LTV: ≥3:1
Return Rate: <5% ideal
COGS % Revenue: 40–70%
Integration Points
startup-financial-model — Build 3-statement models for fundraising prep or annual planningkpi-alert-system — Automate threshold alerts for KPIs tracked in monthly CFO packageqbo-automation — Pull actuals from QuickBooks for close and reportingar-collections-agent — Manage AR follow-up workflow surfaced in CFO packagecap-table-manager — Handle equity and dilution modeling during fundraising supportthirteen-week-cash-flow — Generate detailed 13-week cash flow forecastbudget-vs-actual — Produce variance analysis for board packagesinvestor-memo-generator — Convert CFO financial narrative into investor documents
Quick Reference: CFO Monthly Checklist
WEEK 1 (Days 1–7)
□ Bank reconciliations complete
□ Payroll reconciled
□ Revenue recognition entries posted
□ AR invoices verified sent
WEEK 2 (Days 8–14)
□ Accruals and adjusting entries
□ Trial balance reviewed
□ Flux analysis completed
□ Statements drafted
WEEK 3 (Days 15–20)
□ CFO package finalized
□ Package delivered to client
□ Monthly strategy call held
□ Action items documented
WEEK 4 (Days 21–31)
□ Next month prep (budget check, upcoming deadlines)
□ 13-week cash forecast updated
□ Compliance calendar reviewed
□ Client health scorecard updated
