How Much Does a Virtual CFO Cost
Whether it’s economic uncertainty, limited budget, or extreme competitiveness, it has become a practical solution for businesses to hire a cost-effective virtual CFO. Amidst economic turmoil and financial challenges, there is no need for small and medium-sized businesses to get an expensive corporate CFO when they can opt for virtual CFO services to run smooth day-to-day, weekly, or monthly financial operations.
With a virtual CFO, small entities can tap into new opportunities and gain a competitive advantage. A virtual CFO can crunch your company’s numbers like a corporate CFO and help you see the big picture. But most SMBs are unsure about how much it costs to hire a virtual CFO.
Keeping that in mind, let’s touch on the need to hire virtual CFO services, cost-analysis of hiring virtual CFO services, and what you can expect from a virtual CFO:
What is the Virtual CFO Pricing in 2023?
The main reason to hire virtual CFO services over corporate CFO is cost savings. Employing part-time CFO services cuts out the need to pay a high salary and benefits to a full-time hired corporate CFO. It saves you from paying their medical insurance, taxes, retirement contributions, and paid holidays.
A fractional CFO has a license, certification, and experience in various industries, like a corporate CFO. If you run a startup, understand that a virtual CFO can help your new company reach the point you want in the next three to five years.
So, if you’re wondering how much does a virtual CFO cost, you’re in for good news. Businesses need to realize that virtual CFO is a highly flexible position. The cost can vary depending on the number of responsibilities and overall timeframe.
In most cases, the cost of hiring a virtual CFO is significantly less than hiring a full-time CFO. In fact, you can hire an experienced and competent CFO from $3,000 to $10,000 a month. But this amount usually varies and depends on the complexity of your company and the many responsibilities you want a virtual CFO to undertake.
Now, to better understand the overall cost of hiring virtual CFO services, you need to be aware of their role and their level of involvement. It will also make it easier for you to calculate and differentiate costs between hiring a virtual CFO, an accountant, and a bookkeeper.
Hiring Virtual CFO Services: How Much Will it Cost Your Company?
Most financial service providers will give a tailored quote to cater to your specific needs. In an ideal scenario, the average cost of hiring a virtual CFO is from $1,000 to $10,000 a month. On the surface, it may seem like a significant amount, but compared to hiring a corporate CFO, it is much less.
When you hire a full-time corporate CFO, it requires you to spend at least $225,000 a year on their salary plus benefits. With outsourced CFO services, you can get the same services at a fraction of the cost.
So, if you search for a particular financial service provider to outsource a virtual CFO, you’ll notice that most agencies offer a combination or bundle of services. For instance, you can hire an accountant, a bookkeeper, and a virtual CFO at a lower cost. You can also consider other added financial services that you might need to step up your finance department and reduce expenses of traditional hiring costs.
How Much Can You Save By Hiring a Virtual CFO
So, how much can a virtual CFO bundle service help you save? On average, you can save 60%-70% by hiring virtual CFO bundle services. The usual annual cost of hiring a corporate CFO is over $350,000, which is excessive for small and medium-sized businesses. Fortunately, you can hire a virtual CFO without compromising on any value and provide additional support to your finance team.
Most financial service providers first learn about your needs and follow criteria to determine a specific price range to render virtual CFO services. When you get a quote from an authorized financial service provider or representative, the total price range should represent all your needs. You also won’t have to worry about miscellaneous fees or hidden costs.
You can also hire a virtual CFO on a weekly basis to cut back on costs and get expert financial advice on a specific matter. Once you hire a virtual CFO, you can count on the expert part of your team member rather than just another vendor. Unlike the traditional approach, think of a hired virtual CFO as an extension of your finance team or department.
What Businesses Can Expect from Virtual CFO Services
There is more than one thing you can achieve by hiring virtual CFO services:
Combine Financial Statements with Company Goals
A virtual CFO can help small businesses align their financial statements with organizational goals. One of the perks of hiring virtual CFO services is that you can render accurate financial data and analyze the results. You can also count on a virtual CFO to get a thorough insight into your finances. Many small entities now hire virtual CFO services to pair their balance sheet and income statements with other goals to drive future growth.
Form an Expansive Understanding of Your Company’s Financial Position
Hiring virtual CFO services also helps you save time you can spend on taking care of other business activities. Once you hire virtual CFO services, you’ll know “when,” “where,” “and “how” to improve your finance team and communicate with your stakeholders.
When you have a solid grasp of your financial statements, you can form a better understanding of your break-even points, address gaps in payables and receivables, and improve profit margins. Hiring a virtual CFO is a sure way to get your business on the right track and raise awareness about your company’s financial position.
You can ask as many questions as you want to a virtual CFO to understand your financial position and how you can make the most out of it. When a virtual CFO reviews your financial statements, you can understand the “what” and “why” behind your finances.
Use Finances to Gain Competitive Advantage
Like big enterprises, small and medium-sized companies cannot interpret and analyze their financial data to identify short-term and long-term opportunities on their own. But a virtual CFO can help you improve your financial position.
You can use this status to gain a competitive edge. A virtual CFO can also help you spend cash efficiently, reduce waste, expand, and maximize production. You can tap into a wide range of business opportunities.
Virtual CFO Services: When You Don’t have a High Valuation
If your company doesn’t have a massive valuation, it makes practical sense to hire virtual CFO services. Most small and medium-sized businesses encounter financial issues, and it takes a finance professional look to identify and resolve the problem before it spirals out of control. Like corporate CFOs, virtual CFOs know how to navigate different aspects of financial data and help companies achieve growth.
While virtual CFO rates vary, you can always expect to get a value. Getting someone to review and monitor your firm’s finances is the most cost-effective approach. Depending on your company’s needs, you can hire virtual CFO services for a short or long period. You can adopt strategic planning and take financial steps to scale up and grow through virtual CFO services.
With virtual CFO services, small and medium enterprises can level the playing field and get the same financial expertise available to large corporations. Once you hire virtual CFO services, you can have virtual access to a chief financial officer to help you set KPIs, stabilize cash flow, get financial reporting, raise capital, and analyze financial data, risks, and opportunities.
Contrary to misguided perception, virtual CFOs are not expensive as corporate CFOs. In fact, the cost of hiring a virtual CFO is more affordable than getting a full-time corporate CFO. Virtual CFOs possess industry experience and can steer your company to achieve the best possible financial outcomes.
Don’t let financial uncertainty hold you back from growing your business. Let our virtual CFO services guide you towards financial success. Contact us today and schedule a consultation to see how we can help!