CFO capacity: fractional, interim or full-time?

1. Why CFO capacity decisions go wrong

CEOs and boards typically misjudge CFO capacity for three reasons:

1. They assume the business is in “steady state”. It rarely is. Most €50m–€1bn companies are in flux: integration, expansion, refinancing, new channels, new geographies or new ownership.
2. They hire for the business they wish they had, not the one they run today. They imagine a clean org, stable margins, reliable data, and a calm board rhythm. Reality is usually different.
3. They overestimate internal absorption capacity. A powerful CFO dropped into an immature finance environment will slow down or churn if the organisation is not ready.

When the CFO decision is made without clarity on what must change in performance, cash, governance, visibility or capability, the result is predictable: mismatched expectations and second attempts.

2. Start with outcomes — not titles or job descriptions

The first task is to articulate what must be different in the business within the next 12–24 months. Not vague aspirations, but clear, measurable shifts.

For CEOs and PE partners, these outcomes typically fall into six buckets:

• Earnings: margin improvement, pricing discipline, SG&A control, commercial finance maturity.
• Cash: liquidity visibility, working capital mechanics, covenant protection.
• Performance rhythm: board cadence, KPI hierarchy, monthly operating reviews.
• Transformation: integration, carve-out, ERP/EPM implementation, new business model.
• Risk & governance: controls, compliance, policies, audit readiness.
• Team & systems: FP&A, business control, SSC, data quality, reporting backbone.

Once these outcomes are explicit, the required CFO capacity — fractional, interim or full-time — becomes much clearer. The common mistake is starting with “What title should we hire?” instead of “What must change?”

In practice, many of these shifts are less about hiring a person and more about whether the finance function is scaled to the business’s actual complexity.

3. When a full-time CFO is the right answer

A full-time CFO is the right answer when the business environment requires continuous leadership intensity — not episodic intervention. In practice, this becomes true once complexity crosses a threshold.

Clear indicators you need a full-time CFO:

• You have a multi-entity, multi-country or multi-channel operating model.
• You have leverage, lender dialogue, banking covenants or refinancing events.
• Your board or investors expect tight performance management every month.
• Your FP&A, business control or data landscape cannot run without a strong leader.
• You are in a PE-owned environment and the value-creation plan has dependencies across functions.
• Your CEO needs a partner in strategic execution, not just reporting.

In businesses above €150m–€200m revenue — especially PE-backed — a full-time CFO is not optional. Even if the company has strong No. 2 finance leaders, the CEO cannot outsource the CFO’s relational and orchestration role to fractional capacity.

4. When an interim CFO is the right answer

Interim CFO roles are event-driven. They are not a compromise; they are a high-leverage intervention when timing and execution matter.

Common triggers:

• CFO departure at the wrong moment — refinancing, audit pressure, integration or underperformance.
• Post-merger integration — when systems, data, controls and cash must be stabilised before designing the long-term finance organisation.
• Turnaround situations — immediate liquidity visibility, weekly cash cadence and margin control.
• Exit or investor events — intense stakeholder management and data readiness under time pressure.
• Material leadership or capability gaps — where the existing team cannot stretch without breaking.

A strong interim CFO is not a caretaker. They create clarity quickly, protect value, install operating cadence, restore visibility and prepare the organisation for a sustainable long-term finance structure.

These situations often coincide with integration pressure, where finance design and leadership discipline break down fastest during integrations and carve-outs.

5. When a fractional CFO is the right answer

Fractional CFOs make sense when the business is not yet complex enough to absorb a full-time senior CFO — but is already too complex for a controller or finance manager to carry the weight.

Typical situations:

• Founder-led businesses entering scale for the first time.
• €20m–€80m revenue companies where commercial complexity is outpacing finance maturity.
• Businesses preparing for PE ownership, audit, refinancing or international expansion.
• Teams with a capable Head of Finance who needs a senior partner and decision-making escalation.

Fractional CFOs work best when there is a committed CEO, weekly access, and a willingness to change how decisions get made. They fail when used as a temporary stopgap for a role that clearly needs to be full-time.

6. Capacity should evolve across a 24-month event horizon

The single biggest improvement CEOs and PE partners can make is shifting from “hire once” thinking to “sequence the next 24 months” thinking. Most organisations won’t maintain the same CFO capacity model through integration, growth, refinancing and steady-state operations.

Typical high-performance sequences:

Sequence A: Interim → Full-time

Best for: integration, carve-outs, sudden CFO departures, liquidity risk. The interim stabilises cash, reporting, governance and cadence. The permanent CFO is hired once the long-term shape of the business is clear.

Sequence B: Fractional + Head of Finance → Full-time CFO

Best for: founder-led companies or early-stage PE businesses. The fractional CFO upgrades decision quality and cadence; the Head of Finance runs operations. Once scale and complexity increase, you can attract a full-time CFO.

Sequence C: Full-time CFO + advisory support

Best for: complex transformations. The CFO owns leadership and investor dialogue; external support accelerates transformation, data foundations, integration or zero-based growth work.

The trick is not to freeze the model. The right model changes as the business moves from integration → transformation → scale → exit horizon.

7. How CEOs and PE partners should make the decision

Five questions simplify the entire debate:

1. What must shift in EBITDA, cash and risk in the next 6–24 months?
2. What leadership intensity does that require?
3. What can the organisation realistically absorb today?
4. What is the ownership context — listed, PE-backed, founder-led?
5. Do we need continuity, intervention or acceleration?

Once these are answered explicitly, the choice between fractional, interim and full-time is no longer a guess — it becomes an operational decision.

A simple decision framework

• Full-time CFO: continuous leadership needed, complexity above threshold.
• Interim CFO: an event has occurred and speed is non-negotiable.
• Fractional CFO: capability must increase ahead of scale.
• Hybrid: sequence your next 24 months deliberately.

The CFO decision is not about replacing someone. It is about selecting the leadership model that protects value and accelerates performance.

8. Closing thought

Companies rarely pick the wrong CFO. They pick the wrong moment — or the wrong model — for the CFO they choose.

If you frame CFO capacity as a sequence across your next 24 months rather than a static hire, your odds of landing the right outcome increase dramatically.