What is the Difference Between a Fractional CFO and a Bookkeeper?

April 10, 2023

Bookkeepers, accountants, and fractional CFOs have some major differences. Here's how to set up your financial 'A' team without breaking the bank.

What is the Difference Between a Fractional CFO and a Bookkeeper?

Whether you’re selling your products on Shopify or Amazon, if your ecommerce brand has any chance of surviving, you need to get on top of your financials and your ecommerce bookkeeping.

But where do you start?

Your first instinct will be to consult the professionals - but who? bookkeepers, accountants, or fractional CFOs?

What are the differences between these roles and who should you be using to help you manage your finances and make informed decisions to grow your ecommerce brand?



What do they do?

Bookkeepers are the financial data collectors. They are usually responsible for recording and categorizing your financial transactions, reconciling accounts, and ensuring that financial records are accurate and up-to-date. 

Traditional bookkeepers don’t necessarily need to have a degree in accounting/finance or have much previous experience to become a bookkeeper. Typically their responsibilities include categorizing income and expenses, paying vendor bills, or sending invoices to your wholesale customers, usually through some kind of accounting software, like Quickbooks or Xero. 

A crucial requirement for tracking your cash flow and understanding your brand’s financial health is accurate bookkeeping. Not only will it ensure you stay compliant with the tax regulations, but it can be incredibly useful to help you also identify areas to increase sales and reduce costs. Unfortunately, many brands use traditional bookkeepers that often don't understand ecommerce bookkeeping (which is a very different process than bookkeeping for your dentist or for a brick & mortar store).

Read more about the differences here: Ecommerce bookkeeping: 6 tips every ecomm business should know.

In addition, Profit & Loss statements and balance sheets prepared by traditional bookkeepers focus only on historical performance of your company. This means, when you are reviewing your financial statements, you're looking at what has already happened in the past. In reality, since ecommerce and DTC operations move so quickly, it's best to consider real-time ecommerce financials to give you better, more relevant data to make smarter decisions.

What don’t bookkeepers do?

While bookkeepers are essential for creating your financial records, they generally don't provide you with any strategic financial advice or long-term planning.

How much do bookkeepers cost?

Generally, bookkeepers range between $250 a month for very simple and small businesses to up to $5,000 a month for large, more complex brands.

Fractional CFOs

What do they do?

Fractional CFOs, on the other hand, are financial advisors who provide financial planning & analysis (FP&A). They look at your financials prepared by your bookkeeper and use that as a base to provide strategic financial advice and long-term planning. 

Fractional CFOs can help your ecommerce brand with tasks such as financial modeling, cash flow analysis, budgeting and forecasting, risk analysis and assessment, performance measurement and benchmarking, IT system selection, implementation support, and fundraising. Using AI accounting and AI bookkeeping, they can also provide insight into industry trends and KPIs to help you make informed decisions about your financial strategy, as well as advise on strategic decision-making such as capital investments or expansion plans. 

How do they differ from a full-time CFO?

As opposed to a full-time CFO, a fractional CFO is an independent contractor working on a part-time or project basis. Hiring a fractional CFO is therefore a cost-effective solution as you scale since you can get access to financial expertise of a professional with extensive knowledge of the industry, without having to pay a full-time salary.

The invaluable insights provided by the fractional CFO will help you make better decisions based on accurate financial information, leading to financial stability for your brand. 

Here's the caveat: Before using a fractional CFO, you need to make sure you have solid financials in place that you can trust.

This is the foundation for all the additional advice and analysis provided by a fractional CFO. If not, either the advice you receive would be based on inaccurate facts, or the CFO will have to redo your numbers, resulting in you effectively overpaying for work that can be done faster, better, and for less money using a bookkeeping automation service like Finaloop.

How much do fractional CFOs cost?

Fractional CFOs range between $3,000 a month for smaller businesses to up to $9,000 a month for larger, more complex brands.

Do I need a bookkeeper or fractional CFO for my ecommerce business?

From day 1 of your ecommerce brand, you need a bookkeeper. If you have a DTC or ecommerce brand and don't have a bookkeeper, go get one today.


You could also use an accountant to help you with your bookkeeping. As their role is to ensure that your financial transactions are recorded accurately and in compliance with the relevant accounting standards and regulations, they can also help you with preparing your tax returns, budgeting, inventory management and payment processing.

When you have cash to invest in growth and need help making strategic decisions about where to put the cash, it's time to consult with a fractional CFO (usually when you reach about $3 million- $40 million in gross revenue). A fractional CFO can help your brand grow your revenue and prep for your future - whether that means scaling the business, prepping for an exit, or just improving your finances.

Once you reach over $40 million in revenue, depending on the complexity of your business, you may want to consider hiring a full-time CFO.

About Finaloop


We are a technology company providing automated end-to-end accounting service to ecommerce businesses. Our system connects to your apps, syncs all your data and reconciles your books in real-time, replacing your bookkeeper, your accounting software, and your ecomm integrations. We offer reconciled books available 24/7, tax-saving insights, and a single place for all your financial data.


The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this site are for general informational purposes only. Readers are advised to consult with their attorney or accountant with any questions or concerns.

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