The fundamental difference lies in accountability, integration, and implementation. A Fractional CFO is an integrated member of your leadership team who takes accountability for financial outcomes and implements solutions. They work 1-4 days per week on an ongoing basis (typically 6-24+ months), attend executive meetings, make decisions, and manage financial operations. A Finance Consultant operates externally, providing specialized advice and analysis for specific projects (typically 4-16 weeks). They deliver recommendations but implementation is your responsibility. Think of it this way: Fractional CFOs are like having a part-time executive on your team; consultants are like hiring an expert for specific advice. The right choice depends on whether you need ongoing leadership (CFO) or project-based expertise (consultant).

Yes, many financial professionals offer both services, and the lines can blur depending on engagement structure. A skilled Fractional CFO can certainly handle project-based work (like fundraising preparation or system implementation), while consultants can sometimes take on more integrated roles. The key is clarifying expectations upfront. Some professionals position themselves as "Fractional CFO" but structure engagements as advisory/consulting (limited hours, project-based). Others position as "consultant" but provide ongoing leadership support that looks more like fractional CFO work. What matters isn't the title but the actual relationship structure: accountability level, integration depth, time commitment, and implementation responsibility. When evaluating either role, focus on these dimensions rather than labels. Ask specifically: "Will you be accountable for outcomes or deliverables?" "How integrated will you be in our team?" "Who implements recommendations?" The answers reveal whether it's truly CFO leadership or consulting advice.

Cost-effectiveness depends entirely on your needs, not absolute cost. For ongoing financial leadership (6+ months), fractional CFOs are dramatically more cost-effective than repeatedly hiring consultants for disconnected projects. Example: 12 months of fractional CFO support costs £45K-£90K; achieving equivalent continuous support through consultants would cost £120K-£200K+ across multiple engagements. However, for one-time specialized needs, consultants can be more cost-effective. Example: complex M&A transaction might cost £35K-£75K from specialized consultant, while fractional CFO might charge £20K-£30K but lack deep M&A expertise, potentially requiring you to hire specialist anyway. The real question isn't "which costs less" but "which delivers better ROI for my specific situation?" Fractional CFOs typically deliver higher ROI for ongoing needs because continuous optimization compounds. Consultants deliver higher ROI for specialized one-time problems where their deep expertise dramatically exceeds generalist capability. Calculate total cost of ownership including opportunity costs and implementation gaps, not just professional fees.

Use this decision tree: If you answer "yes" to 3+ of these questions, you need a Fractional CFO rather than consultant: (1) Do you need financial leadership for 6+ months continuously? (2) Is financial management consuming 10+ hours of founder time weekly? (3) Are you planning to fundraise in the next 12 months? (4) Is your revenue exceeding £500K ARR or approaching it? (5) Do you lack confidence in your financial decision-making? (6) Do you need someone accountable for financial outcomes, not just advice? (7) Does your team lack capacity to implement sophisticated recommendations? Conversely, choose a consultant if: (1) You have a specific, well-defined problem with clear start/end, (2) You need highly specialized expertise you don't need ongoing, (3) You have strong internal team that can implement recommendations, (4) The project duration is clearly 4-16 weeks, (5) You want external validation rather than ongoing partnership. Still uncertain? Schedule calls with both types of professionals. Explain your situation and ask them to recommend the appropriate engagement model. Ethical professionals will steer you toward what actually fits your needs rather than pushing their preferred model.

Absolutely—this sequential approach often makes strategic and financial sense. Many companies start with consultant engagements for specific immediate needs (fundraising model building, financial analysis, system selection) and then transition to fractional CFO for ongoing leadership once they've solved the immediate problem and need continuous support. This works particularly well when: (1) You're below £500K revenue but planning near-term fundraising—consultant helps with fundraise prep; hire CFO post-funding, (2) You have a specific crisis or project that needs immediate specialized attention before longer-term planning makes sense, (3) You're testing whether external financial support delivers value before committing to ongoing engagement, (4) Budget constraints require you to solve immediate problems first, then build infrastructure. The transition typically works smoothly because consultants can provide handoff documentation and may even recommend fractional CFOs. Some professionals operate in both capacities—starting as consultant for specific project, then converting to ongoing fractional CFO if relationship proves valuable. This "try before you commit" approach reduces risk and lets you evaluate fit before longer-term engagement. Just be clear upfront about potential transition so consultant structures their work for continuity rather than one-time delivery.