Fractional FD vs a Full-Time Finance Hire vs an Accountant: What Each One Actually Does and How To Work Out What You Need
Founders weighing up their next finance hire could frame the choice between an accountant, a full-time finance hire, and a part-time or fractional FD as a cost comparison. It’s not as simple as that, and a better place to start is really understanding what each one is actually for. The three roles answer very different questions. They’re not just different price points on the same question.
What an accountant is for
An accountant's core job is historic accuracy and compliance. Correct accounts, filed on time, tax handled properly, statutory obligations met. A good accountant is essential to any business, and their work is the accurate historic record everything else depends on.
What an accountant's brief does not include is forward-looking judgement. Whether to take on debt, whether a client is genuinely profitable once every cost is attributed, how to price a new service line, or how the business should be structured ahead of a future sale. That work sits outside the standard accountancy relationship, however capable the accountant is.
What a full-time finance hire is for
A full-time finance director or head of finance makes sense once the volume and complexity of day-to-day financial decisions is high enough to justify someone in the business every day. Regular board reporting, ongoing team management, constant operational finance questions. The cost is a full senior salary and package (bonus, pension, healthcare…), and it’s the right investment once there is 100% full-time senior work to justify it.
What a fractional FD is for
A fractional FD sits between the two. The work itself is the same forward-looking, judgement-based work a full-time FD would do. What changes is the schedule, matched to the actual volume of strategic decisions a growing business faces, which is rarely a full five days a week.
This is usually the right answer for a business that needs genuine strategic finance input. Cash flow modelling, pricing decisions, growth planning, sale readiness. But not yet enough of that work to justify a full-time senior salary.
Where the three overlap, and where they don’t
The three roles are not mutually exclusive. Most growing businesses eventually need more than one at the same time. An accountant keeps the historic record accurate, a fractional or full-time FD uses that record to help make forward decisions. Removing the accountant to save money when what is actually missing is strategic judgement doesn’t solve the problem, because the two roles were never doing the same job.
Choosing between them
The question is not what’s cheapest. It’s what decision am I actually trying to make, and how often.
Compliance and historic accuracy: an accountant.
Constant, daily strategic and operational finance need: a full-time hire.
Strategic judgement, applied regularly but not full-time: a fractional FD.
Comparing the three purely on day rate, against salary, against retainer, answers the wrong question. The cheapest option is only cheap if it’s actually doing the job you need done.
If you’ve read this and want to explore working with a fractional FD, book a 45-minute consultation here.