Ask a CFO
The questions founders and managing directors actually ask, answered the way they would be answered on a call: the short answer first, then why, then the free tool if there is one. Rates and thresholds are those applying in 2026/27.
26 questions, answered plainly
Thirteen weeks, weekly, and rolled forward every week. Monthly is fine beyond that, but the week is the unit that matters, because payroll, the VAT quarter and the rent all land on their own days and the low point lives between the month ends. The forecast's job is to name the low week while there is still time to move it.
Usually because the profit is parked in the debtor book and the tax accrual. On the demo book each pound of monthly revenue drags about £1.71 of debtors behind it, so growth consumes cash for weeks before feeding it, and the corporation tax on the profit is not due for months, so the cash that looks spare is spoken for.
Cash divided by monthly net burn, where net burn is cash out less cash in on the bank account. If the burn is growing, use the version that grows it: the demo downside is 6.8 months at a flat burn and 5.6 months honestly, and the gap between those two numbers is planning time you do not actually have.
There is no universal number, but there is a method: enough to clear your lowest forecast week with a buffer you choose deliberately, counting the undrawn facility as second-line headroom rather than first. The demo book holds £190,000, sees a £213,000 low week from a £190,000 start, and flags anything under £50,000.
Your own balance sheet. Collecting seven days faster and paying seven days slower frees £117,048 on the demo book, once, without selling anything, and it keeps saving interest for as long as the days stay moved. Agree the creditor days rather than drifting into them: quiet late payment costs more in price than it frees in cash.
State it in two layers. Contribution margin, what is left after the costs that scale, commonly lands between 45 and 60 per cent for agencies and consultancies; the demo runs at 55. EBITDA margin after the fixed base is commonly around 10 to 20 per cent. The split matters more than the averages: the same EBITDA at higher operating leverage is a riskier company.
The salary is not the number. With employer National Insurance, the minimum pension and the software seat, £60,000 runs at £71,250 a year, £83,250 in year one with recruitment and kit. At a 55 per cent contribution margin the run rate alone needs £129,545 of revenue a year. A hire is a revenue target wearing a job title.
Operating leverage. Contribution over profit on the demo book is 5.4, so every percentage point revenue moves, profit moves 5.4 points, in both directions, and a 18.6 per cent revenue fall wipes profit entirely. The same arithmetic is why good months feel so good.
Run the bridge before deciding. In the demo month, two extra clients brought in £7,370 of contribution and the £200 knocked off the rate card to win them gave £4,620 back: most of the volume win was spent buying it. Price cuts are permanent gifts to every existing client unless they are ring-fenced, and the bridge makes the cost visible.
About twelve months to do cheaply what otherwise gets done expensively mid-round: a five-day close producing clean monthly accounts, a cap table reconciling to Companies House, EMI paperwork tidy, IP assigned, advance assurance in, metrics computed from the books, and a data room built before the term sheet. Every one of those is fixable now and priced against you later.
The cap table, against Companies House and the signed certificates. A cap table that does not reconcile ends processes before anyone opens the financials, because it poisons everything downstream: nobody can buy shares whose ownership is uncertain. Then the financial folder, where the first test is whether the management accounts tie to the bank.
On the demo round, £500,000. The pool is created pre-money, the way term sheets usually demand, so it dilutes only the existing holders: £1,000,000 on £4,000,000 pre with a 10 per cent pool leaves founders 70 per cent rather than 80. The counter is to size the pool to the actual hiring plan between rounds, not the round number on the term sheet.
Run both to the same date. On the demo figures, £250,000 for three years costs £87,500 as debt and £600,000 as a 20 per cent stake at a £3,000,000 exit. Equity costs nothing a month and the most overall, which makes it the right money for risk a lender will not carry and the wrong money for a gap a facility would cover.
If your investors will claim the reliefs, yes, and before conversations open. Advance assurance is HMRC saying in advance that the shares should qualify; angels routinely wait for it, and applying mid-round costs weeks at the moment momentum is the scarcest thing you have. SEIS covers the first £250,000 of qualifying investment; EIS runs to £12 million lifetime.
Almost always two: leverage, net debt over EBITDA, commonly capped around 3 times, and interest cover, EBITDA over interest, commonly floored around 4 times, tested quarterly. Both run on adjusted EBITDA as the facility agreement defines it, which is rarely the number in your accounts, so read the definition before signing.
Work out the EBITDA floor under each test and take the higher: the demo book's floor is £64,800 against £328,800 of EBITDA, so profit can fall 80 per cent before the first breach. Measure it while it is comfortable: a breach is an event of default even on a loan being serviced perfectly, and a conversation you start goes better than one the lender starts.
It suits one situation well: growth locked in a debtor book, where the cash to deliver the next job is sitting in invoices for the last one. Price it honestly first, the effective rate lands well above the headline once service and discount fees are in, and compare it against simply collecting faster, which on the demo book frees £117,048 for nothing.
Five working days, one layer a day: bank and cash, revenue and debtors, costs and payroll, the balance sheet, then the pack. A two-week close produces numbers about a month nobody can act on any more. The five-day version is a symptom of a healthy month, invoices raised weekly and ledgers kept reconciled, rather than of heroics.
Six pages: five headline numbers, profit against plan with the variance bridge, cash and the low week, twelve KPIs with targets and direction, risks that move, and the asks. Every page carries three lines of commentary, what happened, why, what we are doing, written the night the numbers close. Sent three days early, so the meeting is for the decisions.
Twelve, each answering a different question: revenue, contribution margin, EBITDA and its margin, cash and its build, debtor and creditor days, the cash conversion cycle, largest-client share, revenue per head, interest cover. Each carries a target and knows its own direction. When two always move together, one of them is decoration and comes off.
Compulsorily, only once the company exceeds two of three limits for two consecutive years: £15 million turnover, £7.5 million balance sheet total, 50 employees, on the thresholds in force from 6 April 2025. A 10 per cent shareholder can demand one anyway, some facilities and investors insist regardless, and a first audit also tests the year before, so readiness starts early.
Because they answer different questions. The budget is the yardstick: what we said in January, held still so variance means something. The roll is what you steer by: re-anchored on the latest actual every close, so one soft month reprices the full year the day it lands rather than surviving until the auditors find it.
Typically £800 to £1,500 a day for someone genuinely senior, at two to six days a month, so roughly £2,000 to £8,000 a month. Against a full-time finance director at £120,000 to £200,000 plus employer costs, the fractional shape exists because most companies under £20 million need the judgment weekly rather than the presence daily.
Hold them to the machine. A live 13 week cash flow by day ten, the close down to five days inside two months, a board pack that needs no presenting, the same number in every meeting, and a downside the board has already seen. The reference question that settles it: what stopped working when they left? The right answer is nothing.
When the days stop flexing: cash decisions needed daily rather than weekly, an acquisition or an audit cycle plus a raise in the same year, or a finance team past the size one visit a week can lead. The tell is the calendar, not the revenue, and the machine a good fractional leaves behind is exactly what the full-timer inherits.
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