What a Fractional CFO Does for a Construction SME in the First 90 Days

Running a construction business is demanding enough without having to worry about whether the numbers stack up. But for many SMEs in the sector, the gap between a solid order book and a healthy bank balance is wider than it should be, and that gap is exactly where a Fractional CFO earns their keep.

If you've been considering bringing in senior financial expertise without the cost of a full-time hire, here's a clear breakdown of what happens in the first 90 days and why those first three months can be genuinely transformative for a construction business.

What Is a Fractional CFO, and Why Does Construction Need One?

A Fractional CFO is an experienced finance director who works with your business on a part-time or project basis. You get CFO-level thinking, cash flow forecasting, financial strategy, commercial oversight without committing to a £80,000+ salary.

Construction SMEs face a specific set of financial challenges that generic accounting support often doesn't address:

• Retentions tied up for months or years
• CIS deductions affecting cash flow week to week
• Subcontractor costs that are hard to track and control
• Project profitability that looks fine on paper but leaks margin in practice
• Growth that outpaces the financial infrastructure behind it

A Fractional CFO bridges the gap between where your numbers are and where they need to be.

Days 1–30: Diagnosis and Financial Clarity

Understanding Where the Money Is — and Isn't

The first month is about getting the full picture. A good Fractional CFO won't start handing out advice before they understand your business inside out. In a construction context, that means:

• Reviewing your current cash flow position and aged debtors
• Assessing how CIS and subcontractor payments are being managed
• Identifying which projects are profitable and which are quietly draining margin
• Understanding your VAT position including whether the flat rate or cash accounting scheme is right for you
• Reviewing your payroll, PAYE liabilities, and any Director's Loan Account balances

For many construction SMEs, this initial review alone surfaces issues that have been quietly costing money for years whether that's retention invoices that haven't been chased, subcontractor payments that haven't been correctly recorded under CIS, or VAT schemes that no longer suit the business's size.

According to the Federation of Small Businesses (FSB), late payment and cash flow remain the number one challenge for small construction firms. Getting absolute clarity on this in the first 30 days is non-negotiable.

Days 31–60: Building the Financial Infrastructure

Putting Systems in Place That Actually Work

Once the diagnosis is done, the focus shifts to building the right structures. This is where a Fractional CFO starts to earn real, tangible returns:

• Setting up a rolling 13-week cash flow forecast so you always know what's coming and when
• Implementing project-level profitability tracking so you can see margin on each contract in real time
• Reviewing your accounting software (Xero or QuickBooks) to ensure it's set up correctly for construction, including CIS functionality
• Creating a retention schedule a live document tracking every pound you're owed in retentions and when it's due to be released
• Reviewing pricing models to ensure quotes are accounting for all overheads, not just labour and materials

This is also the point where tax planning conversations begin. With construction businesses there are often missed opportunities around capital allowances, R&D tax credits for innovative methods or materials, and correct treatment of plant and equipment.

Our team at YRF Accountants regularly work with construction SMEs across Bolton and Manchester to implement exactly this kind of financial infrastructure. You can explore more about our construction accountancy services to see how we approach this.

Days 61–90: Strategy and Growth Foundations

From Reactive to Proactive Financial Management

By month three, the business should start to feel fundamentally different from a financial management perspective. The final phase of the first 90 days is about moving from reactive to strategic:

• Presenting a financial dashboard that gives you an at-a-glance view of business health
• Scenario planning, what does growth look like at 20%, 30%, 50% more revenue? What does it cost to get there?
• Reviewing your relationship with lenders and identifying whether the right finance facilities are in place for growth
• Advising on director remuneration structure salary, dividends, pension contributions to ensure you're paying yourself tax-efficiently
• Preparing for the impact of Making Tax Digital for Income Tax (MTD ITSA), which will affect sole traders and landlords from April 2026

This is also the phase where a Fractional CFO helps you think clearly about what growth costs and whether you're ready for it. Taking on more contracts without the cash flow infrastructure to support them is one of the most common ways a thriving construction SME gets into serious financial difficulty.

The 90-Day Impact: What You Should Expect to See

Is a Fractional CFO Right for Your Construction Business?

If your construction business is turning over £500k or more and you're finding that the financial side of things is either being ignored or consuming too much of your own time, a Fractional CFO is almost certainly a cost-effective solution. The Institute of Chartered Accountants in England and Wales (ICAEW) has consistently highlighted how SMEs underinvest in financial leadership and in construction, that underinvestment directly affects project profitability, cash flow resilience, and the ability to scale.

You can read more about how HMRC expects businesses to manage their tax and financial reporting obligations on the GOV.UK business tax guidance pages.

Frequently Asked Questions

How much does a Fractional CFO cost for a construction SME?

Costs vary depending on scope and hours, but most construction SMEs can access Fractional CFO support for significantly less than a full-time hire — typically ranging from a few hundred to a few thousand pounds per month depending on the level of involvement required. At YRF Accountants, we tailor packages to suit the size and stage of your business.

Do I need a Fractional CFO or just an accountant?

An accountant focuses primarily on compliance, tax returns, bookkeeping and filing. A Fractional CFO goes further, working on financial strategy, forecasting, and business performance. Many construction SMEs need both, which is why we offer integrated services covering both advisory and compliance work.

How quickly will I see results from a Fractional CFO?

Most clients see meaningful improvement within the first 30 days typically through better cash flow visibility and identification of quick wins. The more strategic benefits, improved margins, tax savings and stronger financial infrastructure, typically build through the full 90-day period and beyond.

Can a Fractional CFO help with CIS compliance?

Yes. CIS is one of the most common areas where construction SMEs lose money — through incorrect deductions, missed filings, or subcontractor payment errors. A Fractional CFO working alongside a specialist construction accountant will ensure your CIS processes are watertight and tax efficient.