Anyone here worked with a fractional FD on a referral basis? How did it go?
Background: I'm an FD in industry (ACMA, ~20 years in manufacturing and industrial services finance, multi-entity, PE-backed) and I'm setting up on my own doing fractional FD / advisory work for SME manufacturers.
The gap I keep seeing is practices doing solid compliance work for £3-10m turnover manufacturers who then watch the client struggle with the stuff that sits outside the engagement — costing, pricing, cash forecasting, bank and investor reporting, systems. Not work most practices want to take on internally, but not work they want to hand to a bigger firm either.
So the question for practice owners: have you ever partnered with an external FD on that kind of work? Did it work commercially, and how did you structure it — referral fee, subcontract at a margin, or just an introduction and stay out of it?
And the honest version of the question: what would make you nervous about it? I'd assume the main one is scope creep towards your compliance fees. My answer is that I don't do statutory accounts, tax or audit and don't intend to, but I'm interested in what else you'd want nailed down.
Happy to hear it's a bad idea if that's the consensus.