The KPIs a Fractional CFO Should Be Watching for You

The KPIs a Fractional CFO Should Be Watching for You

A fractional CFO who only produces a P&L and a balance sheet each month is underperforming. The books are table stakes. What you are paying for is insight — a monthly view of the metrics that indicate whether the business is healthy, whether recent decisions are working, and what is about to become a problem.

This checklist covers the KPIs a strategic finance function should be reporting on. Not every business needs every metric, but a fractional CFO worth the retainer will have a point of view on which ones matter for your business and report them consistently.

Revenue and growth

• Total revenue (monthly and trailing 12 months)

• Revenue by channel (retail, DTC, wholesale, marketplace)

• Revenue by product line or service line

• Month-over-month growth rate

• Year-over-year growth rate

• Recurring vs one-time revenue split (if applicable)

• Customer concentration (percentage of revenue from top 5 and top 10 customers)

• New revenue vs expansion revenue (for subscription businesses)

• Churn rate and net revenue retention (for subscription businesses)

Profitability

• Gross margin, blended

• Gross margin by channel

• Gross margin by product or SKU

• Contribution margin (gross margin minus variable sales and marketing costs)

• Operating margin (EBITDA / revenue)

• Net margin

• Fixed cost coverage ratio

• Trade spend as percentage of gross sales (for CPG)

• Labor cost as percentage of revenue (for service businesses)

Unit economics

• Customer acquisition cost (CAC), blended

• CAC by channel

• Lifetime value (LTV) and method of calculation

• LTV to CAC ratio

• CAC payback period

• Average order value (AOV) or average deal size

• Gross margin per unit

• Contribution margin per unit (net of trade spend, returns, freight)

• Repeat purchase rate (for consumer brands)

Cash and working capital

• Cash on hand

• Months of runway at current burn

• Cash conversion cycle (DSO + DIO - DPO)

• Days sales outstanding (DSO)

• Days inventory outstanding (DIO)

• Days payables outstanding (DPO)

• 13-week cash forecast (updated weekly)

• Burn rate (monthly cash consumption or generation)

• Working capital as percentage of revenue

Accounts receivable

• Total AR balance

• AR aging buckets (current, 30, 60, 90+)

• AR turnover ratio

• Percentage of AR past due

• Trade deduction rate (for CPG selling through retail)

• Bad debt expense

Accounts payable

• Total AP balance

• AP aging

• Average days to pay vendors

• Concentration of spend by vendor

Inventory (for product businesses)

• Total inventory value

• Inventory turnover

• Days of inventory on hand

• Slow-moving inventory (items with less than defined turnover)

• Obsolete inventory reserve

• Shrinkage or spoilage rate

• Inventory as percentage of revenue

Sales performance (for businesses with a sales team)

• Pipeline value

• Close rate by stage

• Sales cycle length

• Win rate

• Quota attainment by rep

• Revenue per sales rep

Marketing performance

• Marketing spend as percentage of revenue

• Return on ad spend (ROAS) by channel

• Cost per lead or cost per acquisition by channel

• Marketing contribution to pipeline or revenue

• Conversion rate at key funnel stages

People and productivity

• Total headcount

• Fully loaded cost per employee

• Revenue per employee

• Gross margin per employee

• Voluntary turnover rate

• Open headcount and recruiting costs

Forecasting and variance

• Actual vs budget for revenue, gross margin, and EBITDA

• Forecast vs actual accuracy over trailing periods

• Updated rolling forecast (typically 12 months)

• Scenario analysis for base, upside, and downside cases

Balance sheet health

• Current ratio (current assets / current liabilities)

• Quick ratio (liquid assets / current liabilities)

• Debt to equity

• Debt service coverage ratio (for businesses with loans)

• Net working capital trend

What the monthly reporting package should look like

A good fractional CFO delivers a monthly package that includes:

• A one-page executive summary with the key metrics and the three most important observations

• The full P&L with prior month and prior year comparisons, plus budget variance

• The balance sheet with key ratios calculated

• A cash flow statement for the month and year to date

• The 13-week cash forecast, updated

• Commentary on material variances and recommended actions

• Updated scenario or forecast model if assumptions have changed

The package should be delivered within 10 business days of month-end. Later than that and it has lost most of its decision-making value.

How to use this checklist

If you are evaluating a current fractional CFO, run through this list and note which metrics they deliver consistently. A handful of gaps is normal — not every business needs every metric. If half the list is missing and the missing metrics matter for your business, the finance function is not doing the strategic work you are paying for.

If you are hiring a fractional CFO, share this list as part of the scoping conversation. A candidate who engages with it and has a point of view on which metrics matter for your business is showing you how they think.

If you are building your own dashboard, this is your raw material. Start with the 10 to 15 metrics that actually drive your business decisions. Track them every month. Expand from there.

---

*Thryve's fractional CFO engagements include monthly management reporting built around the KPIs that matter for your business. If you are not sure whether you are getting strategic finance or just bookkeeping in a nicer package, a Quick Review will tell you where the gaps are.*