Where a virtual FD sits
Below a virtual FD sits compliance: the bookkeeper or accounting firm keeping the books clean and the lodgements on time. Above sits a permanent finance leader with the seat, the team and the accountability that comes with employment. The virtual FD is the layer in between: senior judgement, part time, remote, without the salary.
For an early-scale Australian startup that layer often is the finance function. Up to around 20 staff, the finance team does not need to be big, it needs agility, usually led by a Finance Manager or hands-on Financial Controller supported by a bookkeeper or an outsourced accounting firm.[1] A virtual FD is a way of buying the judgement half of that without committing to the headcount, which is why it fits neatly in the gap before a first permanent hire.
What it should actually deliver
Judge the arrangement on decisions, not documents. When someone properly owns the finance side, reporting gets clearer, forecasts become more believable, board prep gets less chaotic, cash conversations get more accurate, and hiring plans get properly tested before they become commitments.[2] Those five changes are what you are paying for. A monthly pack that nobody argues with is not evidence of any of them.
The most typical first mandate is visibility. A founder of a pre-revenue, niche-industry startup came to me looking for a fractional CFO to improve financial visibility and align their financial model with the direction of the business.[3] That is a good scope for a virtual FD engagement, because it is bounded and you can tell quickly whether it worked.
Set a review at 90 days. By day 90, the impact of proper finance ownership is founders making better decisions, not through dramatic change, but through someone who can interpret the numbers, advise on things like adjusting headcount or applying diligence on spending, and identify inconsistencies in the growth story.[4] If nothing in your decision-making changed in three months, the engagement is not working and the polite conversation is overdue.
| Bookkeeper or accounting firm | Virtual FD | |
|---|---|---|
| What they own | Accuracy and compliance. Clean books, lodgements on time, a year end that closes properly. | Judgement. Forecasting, cash, board input and testing the plan before it becomes commitments. |
| How to judge it | On accuracy and timeliness. Either the numbers are right and on time or they are not. | On decisions changed. If nothing about your decision-making is different after 90 days, it is not working. |
| What it costs | A monthly compliance fee, priced for throughput and scaling with transaction volume. | Up to around $210 an hour solo, $270 for a firm. Compare against a permanent controller at $160-200k plus super. |
What it costs against the alternatives
Australian pricing reference: solo virtual CFOs charge up to around $210 an hour and firms up to around $270.[5] The permanent comparison at the equivalent level is a Financial Controller at $160-200k plus super or a Finance Manager at $140-170k plus super, depending on industry, business size and location.[6] For a genuine first finance hire, around $180k gets you someone excellent who can significantly advance the business.[7]
Do that arithmetic honestly rather than assuming the virtual option wins. At two days a month it clearly does. At two days a week you are approaching the cost of a permanent hire without the availability, the ownership or the presence in the room, and a permanent Financial Controller starts to look like the better purchase.
How to choose one, in a crowded market
The supply side has grown quickly. Every second executive finance professional I speak to is considering moving towards the fractional or virtual CFO space, which means the market is getting crowded and harder for businesses to know who to trust with something this important.[8] Many of them are excellent finance people who are new to running a practice, because the ones considering the move are all very financially savvy but not necessarily working in the sales or business development component.[9]
The filter that works is niche. The criterion for getting onto my referral list of the best fractional and virtual CFO advisers in Australia is their absolute niche: the specific market, industry or growth stage where they do their best work and give the most value.[10] I share that list with any business that asks.[11] Ask a candidate that question directly and treat a broad answer as a decline.
The full vetting checklist for a freelance or virtual finance leader, and what to agree upfront, is set out here.
When it stops working
Plan for the end at the beginning. A fractional arrangement is typically relevant to a startup for a finite period, usually 18 to 24 months.[12] For businesses reaching $20M-plus ARR, a full-time finance leader becomes effectively mandatory, because fractional arrangements typically break down at that stage.[13]
Complexity can bring that forward well before revenue does. A single-product SaaS business might not need a first finance hire until Series B and can rely on a fractional for a long time, while complex deep tech businesses like robotics need a finance professional sooner.[14] Once offshore revenue arrives, international entity setup, cross-border tax and foreign compliance all land on finance,[15] and that work is continuous rather than episodic.
When you do reach the transition, a good adviser will tell you rather than defend the retainer. A founder needing a fractional CFO today might require a full-time hire in 18 months, and will remember the conversation when the timing is right.[16] That is the point at which my own work starts: permanent retained search for Australian VC-backed startups and scale-ups, on the first finance hire at roughly 10 to 20 headcount and the first CFO at 50-plus heads and $10M-plus ARR.[17]
If you have hit the ceiling and a permanent hire is next, the stage test and what the search involves are set out here.
Common questions
What is a virtual FD?
A finance director engaged part time and remotely rather than employed: board-level financial input, cash forecasting and growth planning bought by the day or the month. The term is British in origin and used loosely in Australia, where it typically means the same thing as a fractional or virtual CFO at a slightly smaller scale. It sits between compliance work, done by a bookkeeper or accounting firm, and a permanent finance leader with the seat and the team.
What should a virtual FD deliver?
Different decisions, not a nicer monthly pack. Specifically: clearer reporting, more believable forecasts, calmer board prep, more accurate cash conversations, and hiring plans properly tested before they become commitments. Set a review at 90 days, because by then a good arrangement should already have produced better decisions through someone interpreting the numbers, advising on headcount and spending diligence, and identifying inconsistencies in the growth story. If nothing changed, the conversation is overdue.
Is a virtual FD cheaper than hiring?
At low intensity, clearly. Solo virtual CFOs charge up to around $210 an hour and firms up to around $270, against a permanent Financial Controller at $160-200k plus super or a Finance Manager at $140-170k plus super. At two days a month the virtual option wins easily. At two days a week you are approaching the cost of a permanent hire without the availability, the ownership or the presence in the room, and a permanent controller becomes the better purchase.
When does a virtual FD arrangement run out?
Typically after 18 to 24 months, and at $20M-plus ARR a full-time finance leader becomes effectively mandatory because fractional arrangements break down at that scale. Complexity can bring it forward well before revenue does: single-product SaaS can wait until Series B, complex deep tech such as robotics cannot, and once offshore revenue arrives the entity setup, cross-border tax and foreign compliance become continuous work rather than episodic. Agree the transition trigger at the start of the engagement.
References
- Tom Hunter on early-scale startups up to circa 20 staff: the finance team does not need to be big, it needs agility, often led by a Finance Manager or hands-on Financial Controller supported by a bookkeeper or outsourced accounting firm.
- Tom Hunter: with strong finance ownership, reporting gets clearer, forecasts more believable, board prep less chaotic, cash conversations more accurate, and hiring plans properly tested before they become commitments.
- Tom Hunter: assisted a founder of a pre-revenue, niche industry startup who sought a fractional CFO to improve financial visibility and align their financial model with the business's direction.
- Tom Hunter on first finance hires: by day 90 the impact is founders making better decisions, through someone interpreting the numbers, advising on headcount and spending diligence, and identifying inconsistencies in the growth story.
- Story Recruitment 2026 market data: solo virtual CFOs charge up to around $210 an hour and firms up to around $270.
- Story Recruitment salary data: Finance Manager $140-170k + super, Financial Controller $160-200k + super, depending on industry, business size and location.
- Tom Hunter: around $180k, a founder can find an excellent first finance hire capable of significantly advancing the business.
- Tom Hunter: every second executive finance professional he speaks to is considering the fractional or virtual CFO space, making the market crowded and harder for businesses to know who to trust.
- Tom Hunter on the CFO Track podcast: the fractional or virtual CFO space is very popular, and the people considering it are financially savvy but not necessarily working the sales or business development component.
- Tom Hunter on his referral document of fractional and virtual CFO advisers: the key criterion is an absolute niche, detailing the specific market, industry or growth stage where they do their best work.
- Tom Hunter: maintains a referral document of the best fractional and virtual CFO advisers in Australia, shared with any business that asks.
- Story Recruitment guidance: a fractional CFO is typically relevant to a startup for a finite period, usually 18 to 24 months.
- Story Recruitment guidance: at $20M+ ARR a full-time CFO becomes effectively mandatory, as fractional arrangements typically break down at that stage.
- Tom Hunter: a single-product SaaS business might not need a first finance hire until Series B, relying on a fractional CFO for a long time, while complex deep tech businesses like robotics need a finance professional sooner.
- Tom Hunter on Australian startups: most will need offshore revenue from the US, Europe and APAC to hit their desired scale, making international entity setup, cross-border tax and foreign compliance fall to finance.
- Tom Hunter: a founder needing a fractional CFO today might require a full-time hire in 18 months, and will remember the conversation when the timing is right.
- Story Recruitment focus: the first finance hire in a startup (10 to 20 headcount) and the first CFO hire (50+ heads, $10M+ ARR).