Hiring guide
Fractional CFO project or retainer: choose by what must repeat
By CFO Index · Published
Use a project when the output has a clear finish. Use a retainer when an identified responsibility must recur. A forecast can fit either model: building it once is a project; maintaining it, challenging assumptions and using it with management is continuing work.
Write the finish line for a project
Specify the period covered, input sources, scenarios, working files and handover. For a budgeting project, completion might mean an approved assumptions register and a model your finance manager can update. Do not define completion only as a presentation. Clarify whether corrections after review are included and how new requests will be priced. The aim is a usable output, not an indefinite sequence of revisions.
Identify the recurring job before buying a retainer
Name the cadence and owner for forecasting, reporting review, decision meetings and follow-up. Ask how the retainer handles quiet months and exceptional events. A monthly fee without a defined recurring responsibility can turn into access to advice that nobody uses. Conversely, a low-hour arrangement may be unsuitable when managers need hands-on coordination every week. Capacity should follow the work you can describe.
Use a staged arrangement when uncertainty is high
A diagnostic can establish the quality of inputs before either party prices ongoing work. Separate its acceptance from any later retainer: findings delivered should not automatically mean a long-term engagement begins. Define what the second stage would cover and who makes that decision. ICAEW's engagement guidance supports clarity when scope changes for its firms; the staged buying approach here is an editorial suggestion for evaluating CFO proposals.
A practical example
Hypothetical case: a services company needs a twelve-month capacity model before an October planning meeting. Its controller can maintain the model but wants the CFO to challenge assumptions quarterly. The work could be one build project plus explicitly scheduled review sessions. If no internal person owns updates, that same project leaves a maintenance gap. The correct format depends on ownership, not simply the company's headcount.
Price the transition between formats
Ask what happens when the project ends or the retainer stops. Will models remain editable? Are software subscriptions yours or the provider's? Is a handover meeting included? Include these answers in the comparison even when the initial price is attractive. You are choosing both a service and a future operating arrangement. A supposedly one-off project that requires ongoing proprietary access deserves a different cost calculation.
Can you start small?
Yes, if the smaller scope still produces something usable. Reduce the number of decisions or entities covered rather than leaving essential work undefined. A narrowly scoped forecast for one business unit can be sensible; a group forecast that ignores material commitments is not a reliable substitute. Agree the boundaries visibly so management does not use a limited output as if it covered the whole business.