How Much Does An Outsourced CFO Cost?
When it doesn’t make sense for your business to hire a full-time CFO but you are still facing challenges that require those skills, an outsourced CFO could fulfill that need. For businesses that are growing quickly or who need CFO-level guidance at a part-time capacity, an outsourced CFO can make the most sense. You get the service and guidance you need without the full weight of an expensive executive.
But how much should you expect to pay an outsourced CFO—and can you actually get what you need from the outsourced position? To answer these questions, you need to identify why you believe you require CFO-level guidance and strategy and what you expect from that position. You should then consider the capability of outsourced CFO services vs hiring a full-time, C-suite level position to help your company.
Why Should Small Businesses Outsource CFO Functions?
CFO costs for any business can be daunting, but for a small business, they are especially scary. After all, the cost for a C-level executive could significantly balloon your overhead. But the alternative of not getting sound financial guidance from an experienced expert close to the business could be detrimental. This is why many small businesses choose to outsource their CFO needs.
Inviting someone from outside your organization into your finances can make you and your business partners feel uncomfortable if it’s not the right fit. But the perspective of an outsourced CFO might be just what your company needs.
For small businesses, virtual CFO services can offer unique advantages. Your business’ financial health, growth, and sustainability are their concern, and the cost you’ll pay should be considered an investment. With that framework in mind, it may be easier to get comfortable with bringing on a fractional or outsourced CFO. Here are some of the ways you can identify if an outsourced CFO is the right fit and worth the cost:
Focused On Implementation
Financial strategy can only take you so far. It is wise to look for an Outsourced CFO that has experience implementing their financial strategy and has the capacity either within themselves or a firm they work for to roll up their sleeves and get to work within your financial structure.
Excellent Track Record
Case studies, reputation, and recommendations are important for finding the right outsourced CFO services. One of an Outsourced CFOs main benefits is that they have helped a company like yours through a similar strategy or challenge.
Wide Network & Scope
An Outsourced CFOs value could come from more than just their skillset. Many outsourced CFOs will have a network of accountants, consultants, and lenders that you tap to help your business get the help it needs to go to the next level.
Deep Resources & Expertise
Outsourced CFO companies can often provide an advantage over freelance CFOs depending on the strategy. Freelance CFOs can struggle to make substantial changes as a part-time employee unless you resource them internally. An outsourced CFO company will often have the resources available to implement your new strategy.
How Much Does an Outsourced CFO Cost?
The rates you should expect to pay will vary depending on the extent of the CFO role you need to fill. The type of work and the amount of time required will determine the cost. Most Outsourced CFOs cost between $1000 – $12000 a month. The key strategy is to make sure you have a picture in your mind upfront of what success looks like so you can make the scoping session as accurate as possible. It is not always possible for a business owner to determine what they need, that’s why you are hiring a professional, but business owners should be able to cast a vision for where they want to go and a successful end state.
- An average CFO salary runs at $350,000 annually, and this can be overbearing for a small business. Outsourcing can quickly cut that number back to something manageable.
- Outsourced CFO services costs can mitigate themselves if the support you get results in added growth, business savings, and consultation that leads to better financial performance. A good outsourced CFO service should be able to demonstrate their worth, the same way a full-time CFO would need to demonstrate theirs.
What Is The Average Fractional CFO Hourly Rate?
The average fractional CFO hourly rate is anywhere from $175 to $350 an hour. The exact amount will depend on the CFO’s experience, the location, and the the type of business.
How Much Does A Virtual CFO Cost?
The costs of a virtual CFO also average around $175 to $350 an hour or $3,000 to $12,000 per month. Costs can vary by experience, industry and the location of the business.
Where Can I Find an Outsourced CFO?
At Milestone, when we provide CFO-level financial guidance, our aim is to find the best solutions to meet your business’ specific needs. By offering coaching, strategy, veteran insight, and real tools for business growth, you get the financial leadership and guidance you need until it makes more sense financially for you to fill that position full-time. We’ve worked with a lot of businesses who grew quickly with our virtual CFO services, later able to find the right fit for their company. Contact us today to get started with your C-level solutions.
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