When Does Your Startup Need a Fractional CFO?

You've raised a seed round. Revenue is growing. Your CA handles tax filings, but when your investors ask about unit economics, cash runway, or financial projections — you're guessing. Sound familiar? Here are the seven signals that it's time for a fractional CFO.

1. You Can't Answer Investor Questions Confidently

Investors ask pointed questions: What's your gross margin by product line? What's your CAC payback period? How many months of runway do you have at current burn? If you're pulling out a calculator or saying "I'll get back to you," that's a signal.

A fractional CFO builds the financial models and dashboards that give you these answers in real time. More importantly, they know how to frame the narrative around your numbers — which matters when you're fundraising.

2. Your Monthly Books Are Always Late

If your books aren't closed within 7 days of month-end, you're flying blind. Delayed financial close means delayed decisions. You can't optimise what you can't measure, and stale data is almost as bad as no data.

A fractional CFO implements a monthly close process — typically aiming for a 5-day close. This means you get your P&L, balance sheet, and cash flow statement while the month is still fresh enough to act on.

3. You're Preparing for Your Next Funding Round

Series A due diligence is brutal on companies without clean financials. Investors (and their auditors) will scrutinize your revenue recognition, expense categorisation, related-party transactions, and compliance history. A fractional CFO gets your data room ready months in advance, not days.

They also help you build the financial model that underpins your valuation ask — a 3-5 year projection with assumptions that hold up under scrutiny.

4. Cash Flow Surprises Keep Happening

Profitable on paper, cash-strapped in reality. This is one of the most common startup complaints. Revenue recognition and cash collection are two very different things. If you've ever been surprised by a cash crunch despite "good" revenue numbers, you need better cash flow forecasting.

A fractional CFO builds a 13-week rolling cash flow forecast that accounts for receivables ageing, payables scheduling, and seasonal patterns. No more surprises.

5. You're Crossing ₹5 Crore in Revenue

At this stage, compliance obligations increase (tax audit threshold), vendor and customer contracts get more complex, and the cost of financial mistakes multiplies. You need someone who thinks strategically about tax planning, working capital optimisation, and financial controls — not just someone who files returns.

6. Your Team Includes 20+ People

Payroll compliance, ESOP accounting, gratuity provisions, professional tax — HR and finance start overlapping. A fractional CFO ensures these are handled correctly and cost-efficiently. They also help you model the true cost of your next 10 hires, including all statutory obligations.

7. You're Making Decisions Based on Gut Feel

Should you invest in that new product line? Can you afford to hire three more engineers? Should you renegotiate that vendor contract? If your answers are based on intuition rather than data, you need financial infrastructure. A fractional CFO turns your gut-feel decisions into data-driven ones.

Why Fractional, Not Full-Time?

A full-time CFO in India costs ₹40-80 lakh per year. Most startups between seed and Series A don't need — or can't justify — that cost. A fractional CFO gives you 80% of the value at 20% of the cost. You get strategic financial leadership for ₹50,000-2,00,000/month, depending on complexity.

The transition point is usually around Series B or ₹50 crore in revenue — when financial complexity demands full-time attention. Until then, fractional is the smart play.

At TxCount, our fractional CFO service combines CA-grade rigour with AI-powered dashboards. You get real-time MIS, cash flow forecasting, tax planning, and investor-ready reporting — all without hiring a full-time finance team.