Fractional CFO Services for Companies That Outgrew Their Bookkeeper

A bookkeeper records what already happened and a controller makes sure it was recorded correctly. A CFO decides what happens next: how long the runway is, what the next hire costs in months of cash, whether the pricing model actually covers the cost to serve, and what the board needs to see. The usual trigger is not a revenue number but a decision the founder cannot answer from the accounting file. In practice companies reach that point somewhere between one and twenty million dollars of revenue, or earlier if they are raising, carrying inventory or debt, or reporting to a board. Fractional means you buy the judgment without the base salary, equity and severance risk of a full-time hire, and you can scale the engagement up during a raise and back down afterward.

It reversed one of the harshest cash-flow rules startups have faced in years. From 2022, Section 174 required domestic research and experimental expenditures, including a large share of engineering payroll, to be capitalized and amortized over five years instead of deducted immediately. That created phantom taxable income at pre-profit companies, and some startups paid real federal tax while burning cash. The One Big Beautiful Bill Act restored immediate expensing of domestic research costs under new Section 174A for tax years beginning after December 31, 2024. Eligible small businesses may elect to apply the change retroactively to 2022, and companies may generally accelerate their remaining unamortized balances. Foreign research remains on a fifteen-year amortization schedule, so where your engineers sit still changes the answer. For most software companies this is a genuine cash refund opportunity that requires amended returns or an accounting method change to capture.

Yes, through the payroll tax offset. A qualified small business, generally one with less than five million dollars of gross receipts in the current year and no gross receipts more than five years back, may elect to apply up to 500,000 dollars of its research credit against employer payroll taxes rather than income tax. The election is made on a timely filed original return, which is the part companies most often get wrong: miss the deadline and the credit is stranded until the company is profitable. The offset is claimed on quarterly payroll filings beginning the quarter after the return is filed, so it converts a credit into actual cash within a few months. This is separate from the Section 174A expensing question and the two are claimed together.

Section 1202 qualified small business stock can exclude a large share of the gain on an eventual sale of founder or early-investor stock, and it is decided years before the exit. The core requirements are original issuance of C corporation stock, an active qualified trade or business, and gross assets below a statutory limit at the time of issuance. The One Big Beautiful Bill Act meaningfully expanded the rules for stock issued after July 4, 2025: the gross asset limit rose to 75 million dollars, the per-issuer gain cap rose to 15 million dollars with inflation indexing, and a tiered holding period now allows a 50 percent exclusion at three years and 75 percent at four years rather than requiring the full five years for any benefit. The practical consequence is that entity choice, the timing of your issuances, and how you handle conversions and redemptions all need to be evaluated at formation and at every round, not at the term sheet.

A typical engagement runs on a monthly cycle anchored to the close. Books are closed and reviewed in the first week, followed by a management reporting package covering revenue, gross margin, burn, runway and the operating metrics specific to your model. The rolling forecast and thirteen-week cash view are updated, then a working session with the founder or leadership team turns the numbers into decisions on hiring, pricing and spend. Around that cycle sit the periodic pieces: board and investor reporting, budget and scenario planning, lender and diligence requests, and tax strategy coordinated with the return so nothing is decided in isolation. Engagements are usually scoped by the amount of time and depth required rather than sold as a fixed package, and they are designed to flex up during a raise or a diligence process and back down afterward.