What an external CFO does: responsibilities and deliverables
Understand the external CFO's role: cash forecasts, reporting, budget, coordination with the accountants and the responsibilities to set out in the engagement.
Founding Partner and CFO, Iter Advisors
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The external CFO helps management connect cash, results and decisions. The engagement is defined by deliverables, a cadence and responsibilities, not by a title or a revenue threshold.
External CFO: what role in the company?
The external CFO is a financial director involved in a service framework. He can work part-time or on a defined project. The notion of Fractional CFO describes the same use of external finance leadership: the engagement specifies what the person does, their availability and how they work with the teams.
Its role is to make financial data usable for decision-making. Maintained accounts, a budget and a bank balance answer different questions. The CFO brings them together to explain the results, anticipate cash flow needs and prepare the manager's decisions. The administrative scope, investor relations and management are not automatically included.
Before selecting a profile, formulate the problem to be solved: a forecast that is difficult to maintain, late reporting, poorly explained margins or an incomplete financing file. This allows you to request an observable deliverable and verify relevant skills.
Practical responsibilities and expected deliverables
Plan receipts and disbursements
One cash flow forecast links the starting balances to customer, supplier, tax and social due dates, then to activity hypotheses. A rolling forecast can cover thirteen weeks if this horizon corresponds to the decisions to be made. The deliverable must identify the assumptions, the cash flow low point and the actions to be examined.
The useful check occurs during the update: which payments have changed dates, which amounts were incomplete and who corrects the source? Reliability comes from this review with operational managers, not just from the software or the number of columns.
Explain results and variances
Reporting reconciles the closed accounts, the budget and activity indicators. It can present a management income statement, margins by activity and a cash reading. Each indicator must have a definition, a source and a cut-off date. Figures from different periods can give a misleading picture.
The management control adds an explanation of the discrepancies: volume, price, cost, recruitment or billing offset. The deliverable results in decisions attributed to managers, rather than on a dashboard with no follow-up.
Build the budget and scenarios
The CFO links business assumptions, costs and investments. He prepares scenarios to discuss the consequences of recruitment, customer delays or market opening. Assumptions must be visible and modifiable without breaking the calculations. The budget is not a guarantee of future results.
Coordinate accounting work
The engagement can set up a closing timetable, document collection and the reconciliations that reporting depends on. The accounting coordination must identify who keeps the books, who prepares the filings and who signs off the work. The CFO's role does not replace the work entrusted to the chartered accountant or other qualified specialists.
Prepare a financing transaction
For a debt raise or request, the scope may include a financial model, a data file and answers to financial questions. Thesupport for fundraising must distinguish financial preparation, legal advice and the investors' decisions. An engagement guarantees neither funding nor valuation.
| Question from the manager | Deliverable to be agreed | Control expected |
|---|---|---|
| When does cash become tight? | Rolling forecast and scenarios | Reconciled balances and dated assumptions |
| Why does the margin change? | Income statement and variance analysis | Consistent sources and allocation rules |
| What can we finance? | Budget and investment scenarios | Effect on cash, costs and schedule |
| Is the reporting ready? | Closing schedule and review file | Persons responsible and validations identified |
Adapt the engagement to the company's situation
In a startup, the need may centre on cash, recurring revenue and investor reporting. A services SME may prioritise margin by contract and collections. A subsidiary has to reconcile group requirements with its local data. A manufacturer must also look at inventory and production costs.
Neither revenue, nor headcount, nor the funding round alone determines the right set-up. Compare the recurring workload, complexity, in-house skills and the decisions that need someone there every day. The scope of a Part-time CFO for startup is built from these needs.
Control budget and availability
Ask for a quote that sets out the work, its cadence, the agreed availability, the data you must supply and the one-off projects excluded. Compare proposals on the same scope. A monthly presence and a full-time salaried role do not give you the same availability, even when the job titles look alike.
For Iter amounts and formulas, see Fractional CFO pricing page. The grid is centralised on this page to avoid reproducing scales in a guide dedicated to the profession.
CFO and DAF: the title does not define responsibilities
CFO means Chief Financial Officer; DAF is the French title directeur administratif et financier. These titles do not imply that one role is purely strategic and the other purely administrative. Responsibilities depend on the organisation and the authority delegated.
The mandate must specify participation in meetings, management, access to data, validations and possible signature. Presenting a report to the board does not mean serving as a director. Preparing a payment does not mean having the authority to authorise it. For job definition, see CFO profession.
How do I know if this model meets the need?
Identify financial decisions that remain pending and work that is falling behind schedule. Ask who makes them today, with what sources and how often. If the problem is primarily due to missing data, plan to put it in order before promising complete reporting.
A regular and manageable need may fall under the part-time CFO. A departure or a temporary situation may require a financial transition management, with adapted handover and availability. A lasting daily workload may justify internal recruitment. These models can complement each other depending on the stages.
To get started, pick a few priority deliverables, agree contacts and access, then schedule a review. Check what has been produced, what is still blocked and which decisions it has made possible. Then adjust the scope, rather than fixing a standard cadence before you know the case.
Frequently asked questions about the external CFO
What is the difference between an external CFO and a Fractional CFO?
Both terms can describe finance leadership entrusted to an outside professional. The title does not define the remit: availability, deliverables, powers and responsibilities must be set out in the contract.
Can an external CFO participate in the CODIR or on the board?
The engagement may include preparing reporting and attending meetings. Attendance does not automatically confer a corporate office or signing authority; those must be defined separately.
Does the external CFO produce accounting and payroll?
Its role may include coordination and control of the work, depending on the contract. Separately identify the person or service provider who produces the accounting and payroll, their validations and their deadlines.
Is an external CFO or an interim CFO needed?
A recurring need may suit a part-time arrangement. A replacement or temporary situation may call for an interim engagement, with a defined mandate, availability and handover. No universal duration or presence applies to every case.
