Skill: samledger67-dotcom/fractional-cfo-playbook (version 1.0.0)

--- name: fractional-cfo-playbook description: > Complete operational playbook for Fractional CFO engagements. Covers client onboarding financial assessment, monthly close cadence, board-ready reporting packages, cash flow management, strategic financial advisory, and engagement scope templates. Use when setting up or running a Fractional CFO service, onboarding a new client, preparing monthly CFO deliverables, or advising on financial strategy as an outsourced finance executive. NOT for: building financial models from scratch (use startup-financial-model), bookkeeping or transaction recording (use qbo-automation), tax filing preparation (PTIN-required service), or one-time financial analysis without an ongoing advisory context. version: 1.0.0 author: PrecisionLedger tags: - fractional-cfo - advisory - finance - reporting - strategy - client-management --- # Fractional CFO Playbook The complete operating guide for running Fractional CFO engagements — from first call to ongoing monthly value delivery. This skill encodes PrecisionLedger's methodology for outsourced finance executive services. --- ## When to Use This Skill **Trigger phrases:** - "Set up fractional CFO engagement for [client]" - "What should I deliver as fractional CFO this month?" - "Prepare the monthly CFO package for [client]" - "New fractional CFO client — what do we need?" - "Client wants board-ready financials" - "CFO advisory scope for [stage/industry]" - "Cash flow is tight — what does the CFO do?" **NOT for:** - Building a full 3-statement model from scratch → use `startup-financial-model` - Bookkeeping, reconciliation, or data entry → use `qbo-automation` - Tax return preparation or filings → PTIN-required, escalate to Irfan - One-time financial analysis without CFO context → use `financial-analysis-agent` - Cap table and equity management → use `cap-table-manager` --- ## Engagement Tiers Define scope before starting. Three standard tiers: | Tier | Hours/Month | Deliverables | Price Range | Best For | |---|---|---|---|---| | **Starter** | 5–8 hrs | Monthly close review, cash flow report, 1 strategy call | $1,500–$2,500/mo | Pre-revenue to $500K ARR | | **Growth** | 12–20 hrs | Full reporting package, KPI dashboard, board prep, 2 calls | $3,500–$6,000/mo | $500K–$5M ARR | | **Executive** | 20–40 hrs | All of Growth + fundraising support, audit prep, team mgmt | $6,000–$15,000/mo | $5M+ ARR or fundraising | --- ## Phase 1: Client Onboarding (Week 1–2) ### Financial Assessment Checklist ``` □ ACCOUNTING SYSTEMS □ Access to QBO / Xero / NetSuite granted □ Chart of accounts reviewed — gaps or misclassifications noted □ Bank feeds connected and reconciled YTD □ Historical period reviewed (12–24 months minimum) □ FINANCIAL HEALTH SNAPSHOT □ Trailing 12-month P&L reviewed □ Balance sheet reviewed — any red flags? □ Cash flow statement reviewed (or reconstructed if missing) □ AR aging report pulled — any collection issues? □ AP aging report pulled — any payables over 60 days? □ COMPLIANCE & STRUCTURE □ Entity structure confirmed (LLC, C-corp, S-corp?) □ Tax returns reviewed (last 2 years if available) □ Active contracts list obtained (leases, debt, subscriptions) □ Payroll provider confirmed (Gusto, ADP, etc.) □ Bank accounts and signers list obtained □ METRICS & BENCHMARKS □ Gross margin calculated and benchmarked to industry □ Burn rate established (if pre-profit) □ Revenue concentration — top 5 clients as % of revenue? □ Key financial KPIs identified and baseline set ``` ### Onboarding Output: Financial Diagnostic Report Produce a 1-page diagnostic for the client: ``` FINANCIAL DIAGNOSTIC SUMMARY Client: [Name] | Date: [Date] | Prepared by: PrecisionLedger / Sam Ledger FINANCIAL HEALTH SCORE: [Red/Yellow/Green per category] Category Status Notes ──────────────────────────────────────────────── Cash Position 🟡 Yellow $180K — 4 months runway at current burn Revenue 🟢 Green $42K MRR, growing 8% MoM Gross Margin 🔴 Red 38% — below SaaS benchmark of 60–70% AR Aging 🟡 Yellow $28K over 60 days — 3 accounts to address AP/Payables 🟢 Green Current, no overdue Bookkeeping 🟡 Yellow 2 months behind — catching up underway Compliance 🟢 Green Tax returns current, payroll compliant TOP 3 PRIORITIES THIS QUARTER: 1. Improve gross margin: audit COGS, renegotiate vendor contracts 2. Accelerate AR collections: implement net-30 enforcement + follow-up workflow 3. Extend runway: reduce discretionary spend by ~$15K/month UPCOMING DEADLINES: • March 15 — Q4 estimated tax payment • April 15 — Annual tax filing or extension • May 1 — Lease renewal decision required ``` --- ## Phase 2: Monthly Close Cadence ### Close Calendar (Standard Timeline) ``` Day 1–3 (after month end): □ Bank reconciliation completed for all accounts □ Credit card transactions categorized □ Payroll entries posted and reconciled Day 4–7: □ Revenue recognized per schedule □ Prepaid expense amortization entries posted □ Accounts receivable invoices confirmed sent □ Accruals posted (liabilities incurred but not invoiced) Day 8–10: □ Unadjusted trial balance reviewed □ Intercompany eliminations (if applicable) □ Depreciation/amortization posted Day 11–15: □ Final trial balance locked □ Financial statements drafted □ Flux analysis completed (month-over-month variance review) □ CFO package assembled and reviewed Day 15–20: □ CFO package delivered to client □ Monthly strategy call scheduled □ Prior month action items reviewed ``` ### Month-End Flux Analysis Review every line item variance > 10% or > $5K: ``` FLUX ANALYSIS TEMPLATE Account Prior Mo Current Mo $ Change % Change Explanation ──────────────────────────────────────────────────────────────────────────────── Revenue $95,000 $103,000 +$8,000 +8.4% New client Jan 15 COGS $32,000 $39,000 +$7,000 +21.9% ⚠️ Investigate Payroll $48,000 $53,000 +$5,000 +10.4% New hire Feb 1 Software Tools $4,200 $6,800 +$2,600 +61.9% ⚠️ New subscriptions ``` Flag any unexplained variance > 15% for discussion on the monthly call. --- ## Phase 3: Monthly CFO Package ### Standard Deliverables Every month, deliver a client-ready package containing: #### 1. Executive Summary (1 page) ``` [CLIENT NAME] — MONTHLY CFO BRIEF Month: [Month Year] | Prepared: [Date] HEADLINE NUMBERS Revenue: $103,000 (+8.4% vs prior month) Gross Profit: $64,000 (62% margin — on target) Net Income: ($12,000) (investing in growth) Cash Balance: $285,000 (6.2 months runway) WINS THIS MONTH • Closed largest deal to date — $12K MRR contract • COGS margin improved 3 points after AWS renegotiation • Collected $18K of aged AR CONCERNS / WATCH ITEMS • Software spend up 62% — conducting audit next week • Two invoices 45+ days overdue — escalating collections • Runway tightening — fundraise timeline decision needed by Q2 ACTION ITEMS FOR NEXT MONTH □ Software audit — identify and cancel unused tools [CFO] □ Collections call on Acme Corp $8,200 invoice [Ops] □ Series A readiness checklist review [Founder + CFO] ``` #### 2. Financial Statements (3 pages) - Income Statement: Month + YTD, vs. prior month, vs. budget - Balance Sheet: Current month vs. prior month - Cash Flow Statement: Simplified operating/investing/financing #### 3. KPI Dashboard ``` METRIC CURRENT PRIOR MO TARGET STATUS ────────────────────────────────────────────────────────────── MRR $103,000 $95,000 $100,000 🟢 Ahead MRR Growth (MoM) 8.4% 6.2% 7% 🟢 On Track Gross Margin 62% 58% 65% 🟡 Improving Customer Count 47 43 50 🟡 Close Cash Runway (months) 6.2 7.1 6+ 🟡 Watch AR Days Outstanding 38 days 31 days 30 days 🟡 Watch Burn Rate (net) $12,000 $8,000 <$15,000 🟢 OK Payroll as % Rev 51% 50% <55% 🟢 OK ``` #### 4. Cash Flow Forecast (13-week) ``` 13-WEEK CASH FLOW FORECAST Week Start Cash Inflows Outflows End Cash Notes ───────────────────────────────────────────────────────────── Wk 1 $285,000 $35,000 $42,000 $278,000 Payroll Fri Wk 2 $278,000 $18,000 $8,000 $288,000 AR collect Wk 3 $288,000 $22,000 $15,000 $295,000 ... Wk 13 $XXX,000 ... ... $XXX,000 Projected ``` --- ## Phase 4: Strategic Advisory Functions ### Cash Flow Management **Weekly cash flow discipline:** ``` 1. Monitor bank balance every Monday 2. Review AP due this week — approve payment run 3. Flag any AR 30+ days overdue for follow-up 4. Update 13-week forecast if assumptions change 5. Escalate if projected cash < 3 months runway ``` **Cash flow levers (when runway is tight):** ``` ACCELERATE INFLOWS: □ Offer early payment discount (2/10 net 30) for key AR □ Move to upfront/annual billing for new clients □ Collect deposits on new projects □ Line of credit draw if available DEFER OUTFLOWS: □ Negotiate extended terms with vendors (net 60–90) □ Defer non-critical hiring 30–60 days □ Pause discretionary spend categories □ Renegotiate SaaS contracts to annual prepay for discount BRIDGE OPTIONS: □ Revenue-based financing (Clearco, Pipe, Arc) □ SBIC / SBA loan for established businesses □ Convertible note bridge from existing investors □ Founder personal bridge (document properly) ``` ### Fundraising Support When a client is raising capital: ``` FUNDRAISING READINESS CHECKLIST (CFO Role) □ FINANCIAL DATA ROOM □ 3 years historical financials (audited if available) □ Current YTD financials (within 30 days) □ 3-year financial model (base/bear/bull) □ Unit economics summary (LTV, CAC, payback period) □ Revenue cohort analysis □ Cap table (current + pro forma post-raise) □ METRICS PACKAGE □ MRR/ARR waterfall (12 months) □ Gross margin trend □ Burn and runway calculation □ Net Revenue Retention □ Customer count and churn □ DILIGENCE SUPPORT □ Bank statements (12–24 months) □ Payroll records □ Material contracts list □ IP and asset register □ Outstanding liabilities schedule □ INVESTOR NARRATIVE □ Financial story: how does the business make money? □ Why the numbers look the way they do □ What this raise funds and for how long □ Key milestones unlocked by this capital ``` ### Board Meeting Preparation Monthly or quarterly board package: ``` BOARD PACKAGE STRUCTURE 1. EXECUTIVE SUMMARY (1 page) - Revenue, growth, margin, cash — vs. prior period and budget - Top 3 wins, top 3 challenges 2. FINANCIAL STATEMENTS (3 pages) - P&L with budget variance column - Balance sheet - Cash flow summary 3. KPI SCORECARD (1 page) - All agreed board-level KPIs in one table - Red/Yellow/Green status 4. BUDGET VS. ACTUAL (1 page) - Month and YTD variance - Explanation for significant variances 5. UPDATED FORECAST (1 page) - Revised full-year projection - Key assumption changes since last board meeting 6. APPENDIX - Department-level P&L breakdowns - Headcount report - Pipeline/bookings summary (if available from sales) ``` --- ## Engagement Management ### Scope of Work Template ``` FRACTIONAL CFO ENGAGEMENT — SCOPE OF WORK Client: [Client Name] Effective Date: [Date] Tier: Growth ($4,500/month, 15 hours/month) MONTHLY DELIVERABLES: 1. Monthly financial close oversight (Days 1–15) 2. Financial statements (P&L, Balance Sheet, Cash Flow) 3. KPI dashboard update 4. 13-week cash flow forecast 5. Monthly CFO brief (executive summary) 6. Two 60-minute strategy calls per month QUARTERLY DELIVERABLES: 7. Updated 12-month financial model 8. Board package preparation 9. Quarterly business review presentation ANNUAL DELIVERABLES: 10. Annual budget and operating plan 11. Year-end close support and audit readiness 12. Annual financial strategy review OUT OF SCOPE (separate engagement or referral): • Tax return preparation and filing • Bookkeeping and daily transaction recording • Payroll processing • Legal or HR services • Audit or attest services COMMUNICATION: • Primary contact: [Name] • Response SLA: 24 hours (business days) • Emergency escalation: [method] • Monthly call: [recurring time] FEES: • Monthly retainer: $4,500 (billed 1st of month) • Overage: $250/hour above 15 hours (pre-approved) • Out-of-pocket expenses billed at cost with receipts ``` ### Client Health Scorecard Track engagement health monthly: ``` CLIENT: [Name] | MONTH: [Month] Relationship Health □ Monthly call completed? Y/N □ Deliverables on time? Y/N □ Client responsive to requests? Y/N □ Open action items > 30 days old? Y/N Financial Health Indicators □ Bookkeeping current? Y/N □ Cash > 3 months runway? Y/N □ No undisclosed liabilities? Y/N □ Compliance deadlines on track? Y/N Engagement Risk □ Scope creep this month? Y/N □ Hours within budget? Y/N □ Any relationship concerns? Y/N OVERALL STATUS: 🟢 Healthy / 🟡 Watch / 🔴 Escalate ``` --- ## Industry-Specific Benchmarks ### SaaS ``` Gross Margin: 65–80% (below 60% = cost problem) S&M as % Revenue: 20–40% (early stage) / 15–25% (mature) R&D as % Revenue: 15–25% G&A as % Revenue: 8–15% Rule of 40: ≥40 (Growth % + EBITDA Margin %) NRR (Net Rev Retention): >100% excellent, 80–100% ok, <80% problem LTV:CAC: ≥3:1 minimum, 5:1+ healthy ``` ### Professional Services / Consulting ``` Gross Margin: 50–70% (revenue minus direct labor) Utilization Rate: 65–75% (billable hours / available hours) Revenue per Employee: $150K–$350K (varies by specialty) Client Concentration: No single client >25% of revenue AR Days: <35 days ideal ``` ### E-commerce / Retail ``` Gross Margin: 30–60% (depends on category) Inventory Turnover: 6–12x per year CAC:LTV: ≥3:1 Return Rate: <5% ideal COGS % Revenue: 40–70% ``` --- ## Integration Points - **`startup-financial-model`** — Build 3-statement models for fundraising prep or annual planning - **`kpi-alert-system`** — Automate threshold alerts for KPIs tracked in monthly CFO package - **`qbo-automation`** — Pull actuals from QuickBooks for close and reporting - **`ar-collections-agent`** — Manage AR follow-up workflow surfaced in CFO package - **`cap-table-manager`** — Handle equity and dilution modeling during fundraising support - **`thirteen-week-cash-flow`** — Generate detailed 13-week cash flow forecast - **`budget-vs-actual`** — Produce variance analysis for board packages - **`investor-memo-generator`** — Convert CFO financial narrative into investor documents --- ## Quick Reference: CFO Monthly Checklist ``` WEEK 1 (Days 1–7) □ Bank reconciliations complete □ Payroll reconciled □ Revenue recognition entries posted □ AR invoices verified sent WEEK 2 (Days 8–14) □ Accruals and adjusting entries □ Trial balance reviewed □ Flux analysis completed □ Statements drafted WEEK 3 (Days 15–20) □ CFO package finalized □ Package delivered to client □ Monthly strategy call held □ Action items documented WEEK 4 (Days 21–31) □ Next month prep (budget check, upcoming deadlines) □ 13-week cash forecast updated □ Compliance calendar reviewed □ Client health scorecard updated ```


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