Outsource the transactional layer first
The most common and most effective structure I see in Australian startups is not an outsourced CFO at all. It is a financial controller in-house handling the higher-end work, with an outsourced bookkeeper covering accounts payable, reconciliations and payroll.[1] That model works best for businesses of roughly ten to fifty people.[2]
The logic is about where judgement is needed. The controller handles strategic work and oversight while the outsourced bookkeeper manages transactional processing, which keeps the controller off the low-value work and stops you hiring several full-time finance people too early.[3] Outsourcing the transactional layer is nearly always the right call. Outsourcing the judgement layer is the decision that actually needs thinking about.
| Layer | Outsource it, or keep it in-house | |
|---|---|---|
| Transactional processing | AP, AR, reconciliations, payroll | Outsource it. A bookkeeper or accounting firm handles this well and cheaply, and it keeps your senior hire off low-value work. |
| Reporting and close | Month-end, compliance, clean numbers | Usually in-house once you are past roughly ten people. This is where a controller earns their salary. |
| Strategic judgement | Model, capital, board | Fractional or outsourced works as a bridge for 18 to 24 months. Becomes a full-time hire as the business approaches $20m ARR. |
What an outsourced CFO gives you, and what it does not
At the top of the stack, an outsourced or fractional CFO buys senior judgement without a full-time salary. For a seed-stage business that runs $1k to $3k a month for five to ten hours a month, scaling to $5k to $10k a month for five to ten hours a week in a hyper-growth or operationally complex business.[4] Used well it delivers eighteen to twenty-four months of proper financial visibility before you need a full-timer.[5]
What it does not give you is presence. An outsourced CFO is not in the room when the pricing conversation happens, not close enough to the team to notice a problem forming, and not accountable in the way an employee is. For a business where finance is mostly reporting and compliance that is fine. For one where finance needs to shape decisions as they are made, the gap becomes expensive.
I set out the fractional model in full, including when it works, when it does not and what it costs here.
Where the arrangement breaks
There is a reasonably clear ceiling. For businesses reaching $20m ARR and beyond, a full-time CFO becomes effectively mandatory, because fractional and outsourced arrangements typically break down at that stage.[6] The role stops being a set of discrete questions and becomes continuous: a board that wants a forward view every month, a team to lead, and decisions that cannot wait for the next scheduled session.
A fractional or outsourced CFO is usually relevant for a finite period, typically eighteen to twenty-four months.[7] Treat it as a bridge with a known end rather than a permanent operating model, and plan the permanent hire before the arrangement starts straining.
Choosing between a solo operator and a firm
What you are really choosing between is an individual and a firm, and how many hours a month you need. A solo fractional CFO gives you one relationship and consistent judgement, but limited capacity and no cover when they are unavailable. A firm gives you depth and continuity, usually at a higher rate, with the trade-off that the person in your business may change.
For most founders at the gap stage the solo operator is the better fit, because the value is in the judgement rather than the throughput. Once the volume of work is the constraint rather than the thinking, that is usually the signal you are heading towards a permanent hire.
If you are trying to work out whether the role is a full-time CFO yet, I set out the signals separately here.
Common questions
What does an outsourced CFO do?
An outsourced or fractional CFO provides senior finance judgement from outside the business: the model, capital planning, board reporting and the decisions that need experience rather than processing. It typically costs $1k to $3k a month for five to ten hours a month at seed stage, rising to $5k to $10k a month for five to ten hours a week in hyper-growth or operationally complex businesses. What it does not provide is presence in the room when decisions are actually made.
Should I outsource my whole finance function?
Rarely. The structure that works best for Australian startups of roughly ten to fifty people is an in-house financial controller handling the higher-end work with an outsourced bookkeeper covering accounts payable, reconciliations and payroll. Outsourcing the transactional layer is almost always right. Outsourcing the judgement layer is a genuine trade-off, and it works best as a time-limited bridge.
When does an outsourced CFO stop working?
Around $20m ARR a full-time CFO becomes effectively mandatory, because fractional and outsourced arrangements typically break down at that stage. The role stops being a set of discrete questions and becomes continuous: a board wanting a forward view every month, a team to lead, and decisions that cannot wait for the next scheduled session. Most fractional arrangements are relevant for a finite period of eighteen to twenty-four months.
Is a solo fractional CFO better than a firm?
It depends on whether your constraint is thinking or throughput. A solo operator gives you one relationship and consistent judgement, with limited capacity and no cover when unavailable. A firm gives depth and continuity at a higher rate, but the person in your business may change. At the gap stage most founders are better served by a solo operator, because the value is in the judgement. When volume becomes the constraint, you are usually heading towards a permanent hire.
References
- Story Recruitment guidance: the classic startup model pairs a Financial Controller handling higher-end work with an outsourced bookkeeper for accounts payable, reconciliations and payroll.
- Story Recruitment guidance: the Financial Controller plus outsourced bookkeeper structure works best for companies of roughly 10 to 50 people.
- Story Recruitment guidance: the Controller handles strategic work and oversight while the outsourced bookkeeper manages transactional tasks, avoiding hiring several full-time finance people too early.
- Story Recruitment 2026 fractional finance cost data: $1-3k per month for 5-10 hours per month at seed stage, scaling to $5-10k per month for 5-10 hours per week for hyper-growth or operationally complex businesses.
- Story Recruitment guidance: fractional finance can provide 18-24 months of proper financial visibility before a full-time hire is needed.
- Story Recruitment guidance: for businesses reaching $20m+ ARR a full-time CFO becomes effectively mandatory, as fractional arrangements typically break down at this stage.
- Story Recruitment guidance: a fractional CFO is typically relevant to a startup for a finite period, usually 18 to 24 months.