Seattle Fractional CFO: 5 Questions to Ask Before You Hire

Seattle Fractional CFO: 5 Questions to Ask Before You Hire

A Seattle fractional CFO is a part-time finance leader you hire for a set number of hours or a fixed monthly fee, instead of a full-time executive. The role fits a business that has outgrown its bookkeeping but cannot yet justify a salary, a bonus and a seat at the table for a full-time CFO.

The five questions below are the ones to settle before you sign, in the order that tends to matter. The numbering is a sequence, not a ranking.

On our partner roster, one Sam's List partner lists a Seattle base: System Six, a bookkeeping and fractional CFO firm whose live profile lists Professional Service Firms and Non-Profit Organizations among its specialties. That is the whole Seattle roster as of its last update, and System Six is written up below. System Six is a vetted Sam's List member and a paying member of our featured program; payment does not buy the language we use or its reviews. You can read how we picked this firm at the end.

1. Seattle Fractional CFO vs Bookkeeper: What Will Each One Own?

Start with the division of labor. A bookkeeper records what happened: transactions, reconciliations, payroll entries. A fractional CFO looks forward: cash forecasts, budgets, pricing, hiring plans and what the numbers mean for decisions. Many small businesses hire the second when what they really need is the first.

Ask the candidate to describe, in plain terms, what they will do in the first 90 days and what stays with whoever does your books. If the books are a mess, a forecast built on them is a guess. A sensible fractional CFO will say so and may suggest cleaning up the records before building on them.

Ask who owns the month-end close, the chart of accounts and the relationship with your tax preparer. Where responsibility is vague, work tends to fall between people.

The limitation: some firms offer both services, which can simplify coordination, but it also means one party checks its own work. Ask how the firm separates who prepares the numbers from who reviews them.

2. How Does a Seattle Fractional CFO Charge, and What Is Out of Scope?

Fractional CFO cost varies with scope. Common models are a fixed monthly fee, an hourly rate or a retainer with a set number of hours. A fixed fee is easier to budget, but it only works if the scope is written down.

Ask what the fee includes and what triggers extra charges. Common surprises are board or lender meetings, a one-time cleanup, a financing project, a tax-related task or a spike in transaction volume. Ask what the minimum commitment is and how you can end the engagement.

Compare fees to what the work replaces, not only to zero. A fractional CFO who prevents one wrong hire or one cash shortfall can offset many months of fees, and one who produces reports nobody reads cannot.

The limitation: a low monthly fee can mean a narrow scope, and a broad scope can mean a higher fee. A number is only comparable when the scope behind it is the same, so ask for it in writing.

3. What Reports Will You Get, and When?

A fractional CFO is valuable to the extent that their output changes what you do. Ask to see a sample of what you will actually receive: the monthly financial package, a cash forecast, a budget-versus-actual comparison, a short written summary.

Ask when it arrives. A report delivered 45 days after the month closes is history. A report delivered within a couple of weeks is something you can act on. Ask what the firm needs from you, and how quickly, to hit that schedule.

Ask how they handle a question between meetings. Some engagements include a standing call. Others are reactive. Neither is wrong, but you should know which one you are buying.

The limitation: more reports are not better. A long package that nobody reads is worse than a one-page summary that drives a decision, and the cost of producing it is in the fee.

4. Who Does the Work, and Who Will You Talk To?

Larger firms often have a person who sells the engagement and a team that delivers it. That can be a strength, because a team covers vacations and has specialists. It can also mean the person you met is not the person you talk to.

Ask who will be assigned to you, what their experience is and how many other clients they carry. Ask what happens if that person leaves. Ask whether the team includes someone who prepares tax returns or whether tax is handled by someone else.

Ask for a reference from a business of your size. A conversation with a current client in a comparable situation will tell you more than a brochure, including how the firm behaves when something goes wrong.

The limitation: a firm's size is neither a strength nor a weakness by itself. A bigger bench helps when it is organized and a small team helps when it is attentive, so ask about the specifics.

5. Does the Firm Know Professional Services Firm Finance and Your Kind of Business?

Industry matters more than most owners expect. A professional services firm sells time, so utilization, rates, realization and billing discipline drive the numbers. A product business turns on inventory and margin. A nonprofit has restricted funds and its own reporting. A forecast built by someone who does not know your model will miss what matters.

Ask how many businesses like yours the firm serves, what they typically need, and what the first numbers they look at would be. The answers will tell you whether the firm knows your business or is learning it on your fee.

Seattle adds a layer. Washington has no personal income tax, but its business and occupation tax is generally charged on gross receipts rather than profit, and Seattle has its own business taxes. Ask whether the firm tracks those in its forecasts, and who files them.

System Six fits this part of the problem. It is based in Seattle, founded in 2009, with about 41 employees, serving clients nationwide. Its live profile lists Non-Profit Organizations, Professional Service Firms and Real Estate Investors as specialties, and bookkeeping, accounts payable and receivable, payroll, advisory services and financial advice and coaching among its services, with monthly fixed fees starting at $800.

System Six is early in building a review history on Sam's List, so we do not cite a review count and describe the firm by what its profile says instead.

The limitation, plainly: System Six's profile lists a $1 million revenue minimum, so a smaller business may fall outside what it takes on. The profile does not say what a fractional CFO engagement costs beyond the starting fee, so ask what scope the $800 monthly figure covers and what is billed on top.

Frequently Asked Questions

What does a fractional CFO do?

A fractional CFO is a part-time finance leader who handles forecasting, budgeting, cash planning, financial reporting and advice on decisions such as pricing and hiring. Unlike a bookkeeper, who records what happened, the role looks ahead and helps you decide what to do next.

How much does a Seattle fractional CFO cost?

It varies by scope and firm. Fixed monthly fees, hourly rates and retainers are all common. Compare the same scope across firms, ask what is excluded and what triggers extra fees, and get the terms in writing before you sign.

Is a fractional CFO the same as a bookkeeper?

No. A bookkeeper records transactions and keeps the books current. A fractional CFO uses that information to plan, forecast and advise. A fractional CFO generally depends on accurate books, so many businesses need both, sometimes from the same firm.

When is a business ready for a fractional CFO?

Common signs are that the books are current but nobody can say what next quarter's cash will look like, a loan or investor is on the horizon, or pricing and hiring decisions are being made by feel. Cleaner records first can make the engagement worth more.

Before you talk to any firm, write down the three decisions you most want better numbers for. You can browse fractional CFOs on Sam's List, including the firm above, and ask each one the five questions in this post.

How We Picked This Firm

You should be able to check our work, so here is how this post was built.

The pool. The pool is the Sam's List partner roster, a snapshot of partners and their listed locations. As of its last update, one partner on it lists a Seattle base: System Six. This is not a survey of every Seattle firm that offers fractional CFO services, and many Sam's List members and other firms not written up here could fit.

How it is organized. The five items are questions to work through in order, not a ranking. One firm is written up, so there is no order of firms.

What review counts mean here. System Six has too few reviews on Sam's List for a count to mean much, so we do not cite one. Where we do cite counts in other posts, a count shows how many clients wrote something down, not technical quality.

What payment does and does not buy. Listing on Sam's List is free, and so is being named in this article. The firm written up here is a paying member of our featured program, which is why it gets a write-up. What payment does not buy is the language we use about a firm, its review count, or a promise that it fits you.

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About the author: Kimberly Green is the cofounder of Sam's List, where business owners and high earners find vetted CPAs, financial advisors, and fractional CFOs. She's met one-on-one with 400+ financial professionals and writes from the real data behind thousands of client-advisor matches. Ask her anything about finding an accountant - she's heard it all, including the questions people are afraid to ask.