Fractional CFO for HCM software companies
HCM contracts combine PEPM subscription with payroll and benefits administration fees and increasingly embedded financial services - earned wage access, insurance, retirement, lending. Each revenue line has its own gross margin and risk profile, and customer count alone tells you very little.
PEPM ARR built around the right unit is the core, alongside explicit accounting for float and trust-account flows from payroll. Embedded financial services revenue is separated from subscription and reported with the regulatory and credit context - acquirers and investors value those streams very differently.
Flow provides financial modelling, FP&A and fractional CFO advisory to HCM software companies across payroll and HRIS, benefits administration, talent acquisition and ATS, performance, learning and employee experience, and PEO and EOR platforms. We work as the outsourced startup CFO through growth, fundraising and sale processes.
KPIs to track for "HCM software" startups
We're very 'KPI-driven' fractional CFOs, and we make sure to monitor the right metrics for your startup.
PEPM ARR
Employees under management
Net retention
Logo retention
Embedded financial services revenue
Float / interest income
Module attach
CAC payback
ARPU per customer
Gross margin
Financial modelling for "HCM software" startups
As fractional CFOs, we build KPI-driven financial models that are insightful and easy to maintain.
Financial modelling is both art and science - models must be robust, but also understandable, and useful for both internal planning and VC fundraising purposes. Hire a fractional CFO who knows how to handle both sides of the equation.
PEPM ARR waterfall
Bookings to recognised revenue built around the per-employee-per-month unit, with seasonal payroll and benefits cycles modelled in. Headcount churn at customer level decomposed from logo churn so the underlying employee base trajectory is visible.
Embedded financial services P&L
Earned wage access, insurance, retirement and lending revenue carved out with own gross margin, credit reserves and regulatory cost. Investors and acquirers value embedded financial services separately from PEPM subscription and at different multiples.
Float & trust-account income
Float income from payroll and trust-account balances modelled by interest-rate scenario, with the regulatory and operational cost of running those flows surfaced alongside. Rate sensitivity in this category is material enough to drive a board conversation on its own.
Module attach across the suite
Module attach across payroll, benefits, ATS, performance, learning and EOR tracked per account with conversion rates tied to historical patterns. The HCM expansion story is multi-module, and a single ARR figure flattens it.
NDR & GRR by employer size
Net and gross retention measured at cohort and employer-size level, with seat (employee) compression in downturns separated from logo churn. Aggregated NDR conceals macro headcount sensitivity that an acquirer will model explicitly.
CAC payback by segment
Fully-loaded CAC and payback by SMB, mid-market and enterprise employers with PEO/EOR economics carved out separately. The SMB self-serve and enterprise field motions have payback profiles that differ by more than a factor of two.
Founders and investors we've worked with
We've supported winning builders across HCM software and beyond.
Marcura
We acted as fractional CFO to Dubai-based Marcura, owner of maritime payroll and B2B payments platform MarTrust, advising on the strategic e-Wallet vendor selection and supporting product/finance integration.
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Hector
We acted as fractional CFO to Hector Aurumi, a Dubai-based specialist software house with AI/ML, IoT and data science expertise, providing confidential valuation guidance to the management team.
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Testim
As a fractional CFO we performed a confidential valuation of Testim, a Tel Aviv-based AI-based software testing automation platform, supporting Elevator Fund's portfolio management.
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Panorays
As a fractional CFO we performed a confidential valuation of Panorays, a Tel Aviv-based software platform for third-party security management, supporting Elevator Fund's portfolio management.
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Percepto
As a fractional CFO we performed a confidential valuation of Percepto, a Tel Aviv-based autonomous drone monitoring platform for critical infrastructure and industrial sites, supporting Elevator Fund's portfolio management.
See moreRecent fractional CFO track record
See our fractional CFO and financial modelling experience across HCM software and beyond.
Simple pricing
No hidden costs, no complicated long-term contracts. We understand how important flexibility is for HCM software startups.
Per month
- Accounting / FP&A tech stack implementation
- Monthly financial statements and reporting pack
- Quarterly board pack with detailed financial analysis (with variance analysis vs. budget, relevant KPI observations etc.)
- Investor-friendly output
Per month
- Everything in Core, plus
- Operating model (via an online platform like Runway or Excel-based)
- Ongoing model maintenance, refining projections, burn/runway management
- Customer cohorts modelling, churn and retention analysis
- LTV / CAC, unit economics analysis
- Cap table management
Per month
- Everything in Grow, plus
- M&A / fundraising support; review of business plan
- Pitch deck preparation
- Investor approach strategy / list building
- Due diligence support and deal negotiation
- Valuation as required and free access to Multiples Pro
Packages shown are illustrative, final pricing is tailored to client requirements.
Explore our fractional CFO offering for similar verticals
We're a specialized fractional CFO to software companies.
Our fractional CFO experience spans across all software verticals.
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We know tech inside & out.
We provide fractional CFO services to companies operating across the entire tech.
More services
We help you scale by providing fractional CFO advice, through fundraising and a successful M&A exit.
VC fundraising for HCM software companies
We help you prepare materials, reach out to investors in our extensive network, negotiate fair term sheets and structure the VC round.
Learn moreM&A for HCM software companies
We advise winning tech companies on M&A exits, and over the years successfully executed numerous transactions with both financial and strategic buyers.
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