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Season 2, Episode 24: Elevate Your Business with a CFO with Melissa Houston

Meet The Expert S2 E24 Melissa Houston CPA

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Welcome to Season 2, Episode 24 of Meet the Expert® with Elliot Kallen!

In this episode, Elliot Kallen brings on Melissa Houston, a contributor for Forbes, a CPA, and a Fractional CFO, to discuss how a CFO can elevate your business and increase profits. Focusing on small to medium-sized businesses (SMBs), Elliot and Melissa give you the insider look at why it’s called “fractional,” at what point you should be hiring, and how a CFO operates differently from a CPA. Following, Melissa tells us why she is inspired to help female entrepreneurs along with the biases that can hold them back from succeeding.

Listen to the podcast here

Meet Our Guest

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Melissa Houston

CPA, Fractional CFO, Author

Melissa Houston is a Chartered Professional Accountant with over 20 years of industry expertise. She is the founder of The Fractional CFO Agency where she provides services to SMB businesses, ensuring that progress is being made towards their goals and projections. With prior experience from a variety of industries including high-technology, accounting, and government, Melissa has a unique understanding on what owners need to maximize success. She shares her knowledge of personal finance and business strategies on Forbes as a columnist and is the host of her own podcast, The Business Society™. Aside from her career achievements, Melissa also has a passion for helping women entrepreneurs transform personal lives through business. She offers services and strategies curated for her female clients, ensuring the particular issues they face are being addressed in the process.

What is a fractional CFO?

Elliot Kallen: Today we are talking with Melissa Houston. She is a consultant and a CPA. She also helps female entrepreneurs, well all entrepreneurs, on the other side. She’s a contributor to Forbes and different enterprise media companies. I’m very excited to have somebody on with these credentials.

Melissa Houston: Thank you so much for having me. I’m very excited to be here.

Elliot Kallen: Let me ask you a few questions. We’ll try to make this lively because it’s more informational than anything else.

We’ve got a lot of small business owners that are our clients from small to medium-sized businesses. A medium-sized business can mean up to 500 employees, but we’re talking about up to 30, 40, or 50 million in sales.

They have CFOs, controllers, accountants, and bookkeepers. What’s a fractional CFO and what do you do?

Melissa Houston: So this is for smaller businesses that can’t afford to bring on a CFO on a permanent, full-time basis. A fractional CFO does the same thing that a CFO does but on a part-time basis.You get the financial guidance, the strategic advice, and the oversight of the accounting department.

“They help guide the CEO by helping them watch out for blind spots. You know, giving them a board to bounce ideas off of. They offer a lot of guidance and support.”

“The CFO is the most senior person in the finance department of your organization. They are usually the right-hand person to the CEO.”

Why is it called fractional?

Elliot Kallen: What does the word fractional mean in terms of CFO? Is it just part-time?

Melissa Houston: “Fractional” has become very trendy in the accounting world, but now it’s not just for accounting. It’s for the C suite in general. So, there are fractional CMOs and fractional CEOs. Fractional C suite positions are becoming very common.

“A smaller business benefits from the service, advice, and guidance that you get from these higher-level positions, but doesn’t have the budget.” 

There are likely bookkeepers and accountants working under me, but I’m checking their work each and every month. I’m doing the financial reporting and sitting with the CEO every month. I’m accessible throughout the month.

We talk about the strategic direction the business wants to go in and look at the financial reports. I explain the numbers to them so they really understand what they mean.

I’m there to bounce ideas off of or to help if they’re considering capital raises. Things like having to deal with the IRS, or in Canada the CRA, we’re there to do the leg work for them.

“There are all kinds of things that a CFO can help a smaller business with, but you don’t have to sacrifice for it now. You can pay on a much smaller scale than you would if you hired somebody to come on full-time.”

When should I hire a CFO?

Elliot Kallen: So when do I as a small business owner, go from meeting a bookkeeper—to a controller—to a fractional CFO—to a CFO? What can I expect?

Melissa Houston: Yeah, absolutely. When you are growing your business, especially when you reach that multiple six figure revenue merge, and you still want to grow your business to seven or eight figures, beyond. Whatever your growth concerns are.

“You need advice and guidance that maybe your bookkeeper or accountant really can’t give you. You need that higher-level advice.”

Or, if you’re going to market to look for capital. Maybe you have some sort of strategic lending plan that you need help with to get the banks on board.

There are different scenarios where you would hire somebody, but mainly when you’re making multiple six figures and you want to grow—that’s when you can bring on a fractional CFO.

I mean, it’s really hard to say what dollar level you should be at when you hire full-time.

  • When the work becomes too much because your business is growing.
  • When there’s too much work for a fractional CFO to do.
  • When your revenues are much higher
  • When demands are growing.

In this case it just makes sense to bring somebody in full time. The fractional CFO is there to help with the transition of hiring somebody full-time. We are bless and release. Thank you very much. We’re going to help you get set up with a full-time CFO when you’re at the point where you can take it on.

How much does a CFO cost?

Elliot Kallen: Let me ask you about ranges. I don’t mean a lot to yourself but let’s get a range of as a business. Because many business owners are going to be watching this throughout the United States. Or mainly in California, but throughout the US. How much can I expect to pay for a controller or a CFO? Obviously, you’re in between because you’re fractional. But what’s my range of you know, I didn’t yesterday. I only need a bookkeeper, and today I need a controller a CFO. What can I expect to come out of pocket here?

Melissa Houston: Yeah, absolutely. It depends on a few questions:

What are your revenue levels at?

How many employees do you have?

How many transactions are going through the business?

Do you need to be supplied with a bookkeeper?

Are you looking for fractional or full-time?

“You’re usually looking at a point of entry of about $2,500, and it can go up to $10,000—and beyond—depending on where your business is at. That’s the cost per month to keep that service ongoing. 

As a fractional CFO service, it’s working on a retainer. Having a fractional CFO is definitely cost-effective for the time that it takes you to grow from a smaller-sized business to the point where you would need full-time services.

“Now, if you had a full-time CFO come in, you also have to consider their salary levels are usually around $250,000 a year, plus benefits, plus perks, plus anything that you offer your employees. It can be a lot more costly to bring somebody in-house.”

Elliot Kallen: You’re a great pivot person for a company like myself that is in double-digit growth mode. We’re not large enough to afford a $250,000 salary but way too large to just deal with a bookkeeper who does your payroll.

Melissa Houston: Exactly. Bookkeepers are great to have. If you have a good one it’s fantastic. But they’re not trained to look at things strategically, right?

When you’re working with a CFO, typically you’re going to be working with somebody who’s going to project your financial plan for the next 12 months.

“They’re going to work with you to understand where you want to take your business, what your financial goals are, where you want to grow, and they’re going to project that 12 months ahead of time.” 

They’re also going to take into consideration capital costs and projections that you’re going to have for shorter-term, two to three years, five years, 10 years, and beyond.

“It’s their job to help you get to where you want to grow.”

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Having that fractional CFO is giving you a lot of strategic thinking, a lot of planning, and they’re monitoring your progress against your plan each and every month. That’s so you can understand what’s going well because you want to capitalize on the things that are going well in your business.

You also identify the things that are not working well. If you have money leaks or what have you, you can plug those up, save a lot of money, and move on from that. Try different things.

Also, when you’re growing your business, you’re going to expect increased profit, but you’re going to get a really laser-sharp focus on monitoring your profit margins.

“You can increase your profit or not, but if your profit margins aren’t staying consistent or increasing while you’re growing your business then that’s a red flag, right?”

Because profit margins are changing.

They’re really telling you how you’re managing your revenue and your expenses. So you want them to grow in line with your revenue. There’s just a lot of ways that a fractional CFO is going to help you increase the profit in your business.

“What you really want to focus on is the profit because that’s the money you get to keep at the end of the day. Profit increases your net worth.”

What is the difference between a CFO and a CPA?

Elliot Kallen: You just described a lot of what a financial strategist does as well. I know you incorporate that into what you do.

Again, as a small business owner, sometimes the hardest thing we have to do is to find somebody who we can bounce ideas off. Someone we can bounce money off. We go to our CPA, and we’re spending 500 to $1,000 an hour to get that answer.

You’re the in-between person.

Melissa Houston: Absolutely. Typically, when you’re working with a fractional CFO, you’re still gonna be working with your tax accountant at the end of the year.

“Ideally, what the fractional CFO does is wrap up all your record-keeping in a bow, everything that’s happened in a year, and hands it off to your CPA.”


A CPA is more tax-focused while a CFO is more focused on long-term financial strategy.

This includes forecasting, budgeting, resolving cash flow issues, optimizing systems, raising capital, and more.

Your CPA will complete your tax return. So you’re still going to need that tax-saving strategy advice. Your fractional CFO can definitely guide you through that if you hired a CPA or a professionally accredited accountant.

It’s really important to understand the difference between having a fractional CFO or CFO working with you versus what your tax accountant does.

How do you help female business owners?

Elliot Kallen: Okay, so along the same lines, I know you and I have talked about it before. You’ve got a niche in the market for particularly helping female business owners, which is a great niche. Tell us more about that.

Melissa Houston: Yeah, I absolutely love helping women with their finances, especially now with the Great Resignation. Historically, there have never been more women starting their own businesses right now.

So it’s not that I don’t work with men because I do. I have plenty of men male clients.

For women, I find it’s a different, unique type of work because women are very emotional. When you’re dealing with money, it can get very emotional.

“There’s a lot of feels that go on, a lot of messages that we’ve been taught over the years from childhood until being a business owner. It’s negatively impacted us, right? There’s a lot of like, oh, you can or can’t do this. You’re a woman.”

It depends on your age, what you know, and the generation that you’ve grown up in. Those types of biases have not completely left the corporate world so you’re dealing with a lot of women who have unique needs.

I help women understand the bigger picture.

  • They can take control of their finances.
  • They understand the numbers and what they mean.
  •  They have the confidence to make their own financial decisions.

<p “=”” dir=”ltr”It’s super important for women and men to understand what’s going on in their finances as business owners./pp “=”” dir=”ltr” style=”text-align: center;”>“They need to understand the decisions that they’re making and whether they’re going to be profitable or not. How much are they going to affect the bottom line?” 

Absolutely everything in business affects your bottom line, whether it’s directly or indirectly. You need to understand the numbers to know that when you’re making a decision if that’s going to be making you money or not.

What does being a writer do for you?

Elliot Kallen: So you’re a writer and a blogger as well. As a freelancer strategist, how does that affect what you’re doing? How does that add to it or just take your time? There are people that want to be bloggers. I’m a blogger, and I’m not sure that does anything more than public relations or get my name out there on some count that people are counting. What does it do for you?

Melissa Houston: For me, it’s a really great networker because I write for Forbes and other large publications. I get access to the CEOs of businesses that I’m interviewing directly, and I get to build a strong network.

“I’ve always loved writing. Writing is a great way to communicate what I’m doing in the world.”

Now also, the writing that I do has led me to land a book agent and an eventual book deal. Hopefully, it’s coming soon. That helps me get my word out. How I can help people and impact their lives.

How can people reach you?

Melissa Houston: You can reach me at or If you’re on LinkedIn @ Melissa Houston, CPA. There’s a theme here right? Instagram @ Melissa Houston, CA.

Elliot Kallen: Great. So we’ve been talking with Melissa Houston who is a CPA out of Canada. She’s a fractional CFO, which is great. She specifically helps women out, but not just women. A lot of male clients are in there too because we have the same problems.

“As the business owner, I can tell you that most of us share all of the same problems— cash flow, cash projections, sales flow, sales, revenue growth, and so forth, and so on.”

She’s a strategist for small business owners. You can’t get enough information on how to have a great financial strategy as a large company that’s already taken care of by other people in your entity. As a small business, like many small business people, you’re up from one to three in the morning or two to five, and you’re thinking about strategy and money. Yes. I can tell you. Cash flow is part of our dreams.

Melissa Houston: Yes, exactly. We’re here to alleviate those stresses. You know, cash projection is part of being a CFO.

Elliot Kallen: She’s a contributor for Forbes. She’s just well-written and well-read. Read the blog or you can find her contact info.

Melissa Houston: Thank you so much for having me. It’s been great talking with you.

Elliot Kallen: Absolutely. We know business owners are gonna watch this over and over. Thank you so much for watching another episode of Meet the Expert. We’ll see you again real soon.

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