Hiring guide
Hiring a fractional CFO for an agency: project margin and capacity
By CFO Index · Published
An agency CFO brief should connect the work sold with the people delivering it and the cash collected. Start with a small sample of projects rather than a company-wide dashboard. Ask whether apparent margin differences reflect genuine economics, inconsistent timesheets or unrecorded changes in scope.
Agree what a project margin includes
Choose a clearly labelled management measure: revenue less identified delivery labour and external project costs, for example. Define how salaries become hourly costs and where non-billable time sits. Do not call that result company profit if rent, sales costs and management time remain outside it. The SEC financial-statement guide is useful background on profit layers, but your project allocation rules require their own documentation.
Work through one completed job
Hypothetical example: a €30,000 project uses €15,000 of assigned labour and €4,000 of contractors, leaving €11,000 before unallocated overhead under this definition. If another €5,000 of unpaid scope changes required delivery work, ignoring that cost would overstate the project's contribution. Reconcile the example to the source records. These numbers illustrate a method, not a target agency margin.
Separate price, delivery and scope problems
Ask the CFO to distinguish a discounted sale from an underestimated workload or extra work that was never approved commercially. Each needs a different response. Finance can make the gap visible, but the account lead and delivery manager must own the operational change. A report that simply labels a client 'unprofitable' may hide a fixable process problem or a deliberate investment decision.
Link capacity to the signed workload
Request a forward view of available delivery hours and committed work, with holidays and non-client responsibilities treated consistently. Keep speculative pipeline separate from contracted work. Discuss what changes if a project slips rather than treating all available hours as sellable. Avoid evaluating individuals from incomplete time records; use the analysis to understand the delivery system and validate information with managers.
Track billing and collection alongside work
A healthy-looking project can still consume cash when billing waits for client approval. Record milestones, unbilled work, invoice status and collection assumptions. The CFO should identify the operational owner of a blocked invoice. Do not assume that raising invoices earlier is possible under every contract. Confirm the agreed terms with the commercial team before building a cash forecast around a changed schedule.
Define a useful initial engagement
Ask for a reconciled sample of completed projects, a capacity view for committed work and a list of billing blockers with owners. Request an explanation of missing or estimated data. Once the method works, decide whether the CFO maintains it or trains your operations lead. Compare candidates on their ability to connect finance with delivery, not simply whether they list agencies as an industry.