Fractional CFO CostFractional CFO rates, and why we price a month
You're looking for fractional CFO rates, and you've probably noticed that the number you find tells you very little. Tax CFO Steven Palmieri leads a practice that prices the month, and Steven and his team can say why. An hourly rate tells you the price of an hour. It doesn't tell you the price of the work.
Turn my rate into a month
What an hourly rate leaves out
A rate is one number, but a CFO's work is made of many things. How many hours will it take? What's included in those hours? Who is doing them? Does a question over email count? Can the same task take ten hours in one company and thirty in another?
Two CFOs can quote the same rate and charge very different totals, and two CFOs can quote very different rates and charge the same. The rate alone doesn't sort that out.
The same task, different hours
Say two companies both ask for a monthly cash read. In the first, the books are closed, matched to the bank and in order, so the read is a conversation. In the second, the bank is months unmatched and the categories are a mess, so most of the time goes to figuring out what the numbers are. The task has the same name and takes a very different number of hours.
That's why the state of your books matters so much to any quote. What moves the price goes through the factors.
What a meter does to your questions
When you know each call costs money, you ration. You save questions for the big moments and let the small ones slide. Small questions are usually the cheap ones to fix, and big ones are what they grow into.
A CFO who bills by the hour isn't doing anything wrong. But the structure makes owners cautious at the very moment they should be asking. A monthly fee that includes your questions takes that pressure away.
How to turn an hourly quote into a monthly number
This worksheet gives you a way to compare. You'll need the quote and a few answers from the person who wrote it.
First, ask for the estimated hours per month, and ask what happens if the estimate is too low. Multiply the rate by the hours. That's the base figure.
Second, ask which tasks are inside those hours. List them in the same rows you'd use for a monthly fee, such as the close, the monthly read, tax planning and questions.
Third, for each row the quote doesn't mention, add a line marked "not mentioned" and ask about it. Anything billed separately gets its own line too.
Fourth, ask whether catch-up is included. If your books are behind, it usually isn't, and it needs its own estimate.
Add the base figure to the separate lines and you have a monthly estimate for the same scope as a retainer would cover. Now the two can be compared. Comparing two quotes line by line has the full table.
Fees are set in writing before work starts.
Why we price a month
We chose the month because it matches how an owner's business actually runs. The books close monthly, the read happens monthly and decisions come out of it. Pricing the same unit means you know the fee for the same work you're getting.
The fee is written down before work starts, and your questions during the month are part of it. If a quote of ours ever depended on a number of hours, we'd show you that too.
Questions to ask whoever quoted the rate
Who does the hours, the person named on the quote or someone more junior? What happens when the estimate is exceeded? Is a short email counted as time? Is a reply to a question a charge? A rate becomes a price only after these have answers, and the answers go on paper.
When an hourly rate does make sense
For a single bounded question, such as "does this lease make sense?", paying for a few hours can be the cleanest route. For a one-time piece of work, a project fee often works. The ongoing monthly rhythm is where a monthly fee tends to serve owners best, and how fractional CFOs charge compares all the models.
Inside the fee. A monthly fee should tell you what the hours would have bought, in rows you can read, so a rate on a different quote can be turned into the same rows and checked against it.
Got an hourly quote you can't compare?
You will be talking to the Steven Palmieri practice.