Fractional CFO or outsourced finance function? What UK businesses actually pay in 2026
Most UK businesses between £1m and £20m turnover don't need a £200k finance director. They need someone who can close the books on time, explain the numbers to the board, and model cash before the bank asks. The question is which model buys that.
The three options, side by side
| Model | Typical UK cost | What you get | Best for |
|---|---|---|---|
| Full-time CFO | Around £216k median base in PE-backed firms; £120k–£250k in London (The CFO) | One senior leader, full time, plus the team you still have to hire | Larger, complex or pre-IPO businesses |
| Fractional CFO | £3,000–£10,000+ per month; day rates of roughly £700–£1,500 | One named senior person, a few days a month, strategy and board work | Fundraising, scaling, investor reporting |
| Outsourced finance function | £1,200–£5,000 per month | A firm's team: bookkeeping, close, management accounts, CFO oversight | Companies without a controller yet |
The difference that matters
A fractional CFO is one named individual on a strategic retainer. An outsourced finance function is a firm's team doing the work, with a senior person overseeing it. The first gives you judgement; the second gives you capacity.
The trap is buying one and expecting the other. A £6,000-a-month fractional CFO who ends up reconciling the bank feed is an expensive bookkeeper. A bookkeeping firm asked to build a fundraising model is out of its depth.
When you need which
You need a fractional CFO when:
- You're raising equity or debt and need a data room, model and diligence answers.
- Your board or investors want a monthly pack and nobody owns it.
- Margins are slipping and you can't say which product, client or channel is responsible.
You need an outsourced finance function when:
- Month-end close takes more than 15 working days, or doesn't happen.
- VAT returns, payroll and Companies House filings depend on one person. You've added entities or currencies and consolidation is a spreadsheet.
Most growing companies need both, which is where the usual set-up breaks down.
Why the split often fails
The common UK pattern is a bookkeeper, a part-time FD and a year-end accountant from three different firms. The FD builds the board pack on numbers they didn't close; the accountant finds adjustments in March that change last year's story. Nobody owns the whole picture.
Questions to ask before you sign
- 1.Who exactly will attend my board meetings, and will that change?
- 2.Who closes the books, and does the CFO review the close before the pack goes out?
- 3.Is the fee fixed for a written scope, or hourly?
- 4.Do you know UK GAAP, VAT and Making Tax Digital — and our second jurisdiction, if we have one?
- 5.What's the notice period if we hire in-house later?
How Step 1 Advisors helps
Step 1 runs both layers from one team: our Fractional CFO practice sits in your leadership meetings, and our Remote Accounting team closes the books it reports on. You get one fixed monthly fee, scoped in writing, and the same people at every review. For UK companies with US or Indian entities, that team already works across all three. Book a diagnostic call.