Fractional CFO services Austin companies hire give them a senior finance lead for a set number of days or hours each month, at a fraction of a full-time salary. The CFO builds the forecast, runs the monthly reporting, manages lender and investor conversations, and owns Texas compliance items such as the franchise (margin) tax report due each May 15.
This guide is written for owners in the Austin-Round Rock-San Marcos metro deciding whether fractional CFO services Austin providers offer fit their stage. It covers the signals that usually justify the hire, what the first 90 days look like, the 2026 and 2027 franchise tax rules verified against the Texas Comptroller, how Texas's lack of a personal income tax affects planning, and what BLS data says about local finance pay.
Most companies reach for a part-time CFO when the questions they face start to outrun the bookkeeping. The table below lists the signals we see most often in Central Texas businesses and the first piece of work a CFO usually delivers for each. It is practitioner guidance; your situation may call for a different starting point.
| Signal | What it looks like in practice | Typical first CFO deliverable |
|---|---|---|
| Revenue is approaching $2.65 million | The company may move from an information-report filer to a franchise taxpayer | Margin calculation under all four methods |
| A raise or bank line is planned | Investors or the lender ask for projections and covenant headroom | Three-statement model and data room index |
| Cash is tight while sales grow | Receivables and payroll outpace collections | Rolling 13-week cash forecast |
| Hiring outside Texas | Remote staff in other states | Nexus and payroll registration review |
| The close takes more than 15 days | Owners make decisions on stale numbers | Close calendar and reporting package |
| Margins differ by product or client | Growth adds revenue with no gain in profit | Contribution margin by line |
If two or more of these apply, our guide on when to hire a fractional CFO walks through the decision in more depth. Companies that mainly need a cleaner close and stronger controls may be better served first by a controller, and our comparison of controller and fractional CFO roles explains where each one fits.
A well-run engagement follows a predictable arc. The timing below is a common pattern, offered as guidance, and it stretches if the books need cleanup.
The CFO reviews the chart of accounts, the last 12 to 24 months of financials, the bank and loan agreements, the cap table if there is one, and the most recent Texas franchise tax report and Public Information Report. The output is a short memo listing what is reliable, what needs fixing, and which decisions the owner is trying to make in the next two quarters.
This phase produces a monthly management package with a balance sheet, income statement, cash flow statement and a one-page KPI summary. Most CFOs also build a rolling cash forecast at this stage. Our article on cash flow forecasting tools and techniques shows how the weekly and monthly views fit together.
With reliable numbers in place, the CFO turns to the budget, the hiring plan and any financing. Venture-backed Austin software companies usually need a model that ties burn and runway to hiring, and our page on SaaS fractional CFO services covers the metrics investors in that sector expect. For founders preparing a round, the piece on how fractional CFOs help with fundraising lists the materials that diligence teams request.
Texas has no corporate income tax. It levies a franchise tax instead, which the Comptroller describes as "a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas." For an Austin company, the franchise tax is usually the largest state-level compliance item a CFO manages, and the method chosen can change the bill materially.
Corporations, LLCs, partnerships and most other legal entities are taxable. According to the Comptroller's franchise tax overview, sole proprietorships (except single-member LLCs) and general partnerships owned entirely by natural persons do not file or pay.
For reports due in 2026 and 2027, the Comptroller's rates and thresholds table sets these figures:
| Item | 2026 and 2027 reports | 2024 and 2025 reports |
|---|---|---|
| No tax due threshold | $2,650,000 | $2,470,000 |
| Rate, retail or wholesale | 0.375% | 0.375% |
| Rate, all other entities | 0.75% | 0.75% |
| Compensation deduction limit (per person) | $480,000 | $450,000 |
| EZ computation revenue ceiling | $20 million | $20 million |
| EZ computation rate | 0.331% | 0.331% |
An entity with annualized total revenue at or below $2,650,000 owes no tax and does not file a franchise tax report. The Comptroller also states that when the tax computed is less than $1,000 on an entity above the threshold, the entity "files the report but does not owe any tax." The annual report is due May 15, moving to the next business day when May 15 falls on a weekend or holiday. The details of who must file are covered in our Texas franchise tax guide.
Unless an entity chooses the EZ computation, its tax base is its margin, which the Comptroller says is computed in one of four ways: total revenue times 70 percent, total revenue minus cost of goods sold, total revenue minus compensation, or total revenue minus $1 million. The Comptroller's fiscal management guide confirms that "the taxable margin equals the lowest of four calculations."
Two rules matter most for Austin's services and software companies. Cost of goods sold covers costs tied to tangible or real property sold, so businesses that "only sell services or intangibles will not generally have allowable costs." Compensation includes W-2 wages up to the per-person cap plus deductible benefits, and it excludes 1099 labor and employer payroll taxes. Margin is then apportioned to Texas "using a single-factor apportionment formula based on gross receipts," so a company that sells mostly to customers outside Texas pays tax on a smaller share.
Falling under the threshold does not end the filing obligation. Corporations, LLCs, limited partnerships, professional associations and financial institutions organized in Texas or with nexus there must file Form 05-102, the Public Information Report, by the franchise tax due date; other taxable entities file Form 05-167, the Ownership Information Report. The Comptroller's PIR and OIR page warns that an entity "may forfeit its right to transact business" if it fails to file, and that forfeiture can make officers and owners personally liable for certain entity debts. Because no tax is due, small LLCs below the threshold can overlook this filing, so a CFO should put it on the May compliance calendar.
Austin's software and hardware companies should note a 2026 change. The Comptroller's R&D credit page states that effective January 1, 2026, Subchapter M was repealed and Subchapter T "was established to continue R&D credits for franchise tax reports but not for sales tax." The credit is based on qualified research expenses reported on IRS Form 6765 that are attributable to research conducted in Texas, and certain entities that owe no franchise tax may claim a refundable credit. Entities using the EZ computation cannot receive the refundable credit. A CFO should coordinate this with the federal side, where our guide to how the One Big Beautiful Bill Act changed Section 174 explains the federal treatment of research costs.
This example is illustrative. An Austin software company organized as an LLC reports total revenue of $6,000,000. It sells services and licenses, so it has no allowable cost of goods sold. W-2 wages are $3,400,000, with no employee above the $480,000 cap, and deductible benefits are $450,000, for compensation of $3,850,000. Sixty percent of its gross receipts are from Texas customers. It is neither a retailer nor a wholesaler, so the 0.75% rate applies.
| Method | Margin | Apportioned at 60% | Tax at 0.75% |
|---|---|---|---|
| 70% of revenue | $4,200,000 | $2,520,000 | $18,900 |
| Revenue minus compensation | $2,150,000 | $1,290,000 | $9,675 |
| Revenue minus $1 million | $5,000,000 | $3,000,000 | $22,500 |
| Revenue minus COGS (none) | $6,000,000 | $3,600,000 | $27,000 |
| EZ computation (0.331% of apportioned revenue) | n/a | $3,600,000 | $11,916 |
The compensation method produces the lowest tax, $9,675. The EZ computation is simpler but costs $2,241 more. EZ filers also cannot receive the refundable R&D credit, although that credit is limited to entities that owe no franchise tax, so it does not apply to this company. If the company later shifts toward hardware with real product costs, the cost of goods sold method could take over, which is why a CFO reruns all four methods every year before the May filing.
The Office of the Texas Governor's business climate page states that Texas has "no corporate or personal income tax." For owners of S corporations, partnerships and single-member LLCs living in Austin, that means business profit flowing to their personal returns faces federal income tax only. A founder's salary is not reduced by state withholding either, which simplifies Texas payroll.
The planning work shifts elsewhere. Pass-through owners in high-tax states often use state pass-through entity tax elections to work around the federal SALT cap, and Texas residents have no such state tax to elect into. Austin employers that hire remote staff in states with an income tax take on withholding, unemployment registration and possible income tax nexus in those states, which our guide to multi-state tax compliance covers. Sales tax still applies to many Austin transactions, and companies selling taxable software or goods should read our Texas sales and use tax guide before assuming a low-tax state means low compliance work.
BLS nonfarm employment data for Austin-Round Rock-San Marcos shows 1,416,600 jobs in September 2026 (preliminary, not seasonally adjusted). Professional and business services is the largest supersector, at roughly one job in five.
| Supersector (Sept 2026, preliminary) | Jobs (thousands) | Share of nonfarm |
|---|---|---|
| Professional and business services | 291.2 | 20.6% |
| Trade, transportation and utilities | 214.1 | 15.1% |
| Government | 204.6 | 14.4% |
| Education and health services | 169.9 | 12.0% |
| Leisure and hospitality | 153.7 | 10.8% |
| Mining, logging and construction | 98.1 | 6.9% |
| Financial activities | 93.0 | 6.6% |
| Manufacturing | 87.6 | 6.2% |
| Other services | 54.9 | 3.9% |
| Information | 49.5 | 3.5% |
Each sector shapes the CFO brief differently. Professional services and software firms usually need utilization or unit economics reporting and the compensation method on the franchise tax. Construction contractors need job costing, work-in-progress schedules and bonding support, which our page on the fractional CFO for construction companies covers. Clinics and specialty practices in the education and health group face payer mix and new-location ramp-up questions, which a CFO models location by location before committing capital. Manufacturers and distributors tend to benefit from the cost of goods sold method and the 0.375% rate if they qualify as wholesalers.
The BLS Occupational Outlook Handbook says financial managers "are responsible for the financial health of an organization" and notes that experienced financial managers may advance to become CFOs. The May 2025 OEWS estimates for the Austin metro give these wage figures:
The Austin median for financial managers is close to the national median of $166,570. A senior CFO with fundraising or M&A experience usually sits near the top of the financial manager range or above it, and salary is only part of the cost once benefits, payroll taxes, bonus and equity are added.
As an illustration, a fractional engagement at $5,000 a month costs $60,000 a year, or $107,180 less than the Austin median salary alone. Fees vary widely with scope, so treat that figure as a placeholder; our breakdown of outsourced CFO cost by company size gives fuller ranges.
What do fractional CFO services in Austin usually include? A typical scope covers monthly management reporting, a cash forecast, budgeting, lender and investor support, and oversight of Texas filings such as the franchise tax report and Public Information Report. The CFO usually works a set number of days per month and coordinates with your bookkeeper and CPA.
Does my Austin company owe franchise tax in 2026? For reports due in 2026 and 2027, an entity with annualized total revenue at or below $2,650,000 owes no franchise tax. It must still file a Public Information Report or Ownership Information Report by May 15 unless it is exempt, passive or a qualifying new veteran-owned business.
Which franchise tax rate applies to a software company? Entities that are not primarily retailers or wholesalers pay 0.75% of taxable margin. Retailers and wholesalers pay 0.375%. Companies with revenue of $20 million or less may elect the EZ computation at 0.331% of apportioned revenue.
Is a fractional CFO worth it if Texas has no personal income tax? The absence of a state income tax removes one planning area, though franchise tax method choice, multi-state payroll for remote staff, sales tax, cash forecasting and capital raising all remain. Most of a CFO's value comes from forecasting and decision support, which every growing company needs regardless of state taxes.
How do I choose between fractional CFO providers? Ask who will do the work each month, what the deliverables and meeting cadence are, and how they would handle your franchise tax method and Texas information reports. Our list of questions to ask a fractional CFO before you hire one includes a fuller checklist.
Madras Accountancy supports US businesses with bookkeeping, tax preparation, payroll, audit support and fractional CFO and advisory services, delivered remotely. If your Austin company is weighing a part-time finance lead or needs help with forecasting and Texas compliance, contact our team to talk through your situation.
The section 4960 excise tax is 21% of nonprofit pay over $1M. From 2026 it covers all employees. See the medical carve-outs, Form 4720 and a worked example.
The paid family and medical leave tax credit is permanent from 2026. See the 12.5% to 25% rates, the premium option, the 6-month rule and how Form 8994 works.
Opportunity zones become permanent in 2027 under the One Big Beautiful Bill. See the new deferral, rural bonus, and the 2026 handoff.
