How Much Does an Outsourced CFO Cost?

by | Feb 24, 2023 | Accounting, eCommerce Accounting, Outsourced CFO

You know you need a CFO but don’t know if you can justify bringing on a full-time employee. You’re facing financial challenges and need a financially-minded strategist in your corner. If this sounds like you, an outsourced CFO might be your best. But how much do outsourced CFOs cost?

How much outsourced CFOs cost depends on numerous factors from the size of your company to the extent of software you plan to implement in your architecture. However, outsourced CFOs offer one clear advantage: they are scalable, which means you only use them when you need them. 

This blog answers how much outsourced CFOs cost and how to maximize the benefits they  provide your company. Whether a small or large company, you can benefit from the tailored approach fractional CFOs provide. Continue reading to learn how. 

At Fully Accountable, we’re committed to providing you with a first-rate financial service that streamlines your company’s finances in an ever-increasing business landscape. Our financial professionals are up-to-date on the latest technologies and use advanced data analytics and financial business intelligence to determine the most effective financial strategies for your business. Contact us today to schedule a 30-minute strategy call.

What Is an Outsourced CFO?

An outsourced CFO operates with a company that isn’t directly affiliated with yours. These professionals will have years of experience in numerous industries and are often called fractional CFOs.

A Fractional CFO works with your company remotely and connects their software infrastructure with the latest technologies so that companies ensure they operate at optimal capacity. With an outsourced CFO, your company doesn’t have to worry about the costly nature of an in-house CFO.

You won’t always need your CFO, and outsourced CFOs give you scalable options that fit within your company’s framework. 

Why Should Small Businesses Outsource CFO Functions?

For small businesses, the costs of hiring a reputable CFO just aren’t feasible. Having a C-suite executive can significantly bloat your costs, especially since you won’t have the financial challenges larger companies face to necessitate a full-time CFO. However, you can’t avoid financial guidance. Hence, why small businesses benefit from fractional outsourced CFOs: they will likely have experience with a company of your size. They can provide tailored advice based on your industry’s financial challenges.   

Inviting an outside influence might make your board members or other employees uncomfortable. However, outside perspectives are often the most valuable additions to your business structure. You can frame an outsourced CFO as an asset your company uses when you need this outside perspective. 

How Much Does an Outsourced CFO Cost?

The rates of your outsourced CFO depend heavily on the scope of their services and the CFO role they need to fulfill. The amount of time required and the extent of their work determines the cost. You should identify what you need them for most and why you need to hire this particular position. 

  • In the US, the average CFO salary is around $350,000. Outsourced CFOs can drastically reduce this cost due to their scalable nature.
  • Outsourced CFO costs are often canceled out due to the sustainable growth, savings, and consultation that leads to better financial performance. 

Can Outsourced CFOs Help Companies Other Than Small Businesses? 

Outsourced CFOs can help companies of all sizes, from small businesses to venture capitalist firms. Whether you’re a startup or a household brand, an outsourced CFO can likely solve many of your financial struggles. 

These professionals have a wide range of skills and can streamline various financial operations within your company or provide the structure to grow sustainably. Outsourced CFOs will be able to issue advice through financial modeling, cash flow analysis, and strategic planning. They can also help you define CFO KPIs and metrics so you can execute and monitor your company progress.

Outsourced CFOs will not only be able to implement efficient compliance structures. They will be able to identify where these tasks detract from your bottom line and reallocate company resources (such as in-house financial professionals) to grow revenue and contribute to financial strategies. 

This will also free other C-Suite executives to focus on other directives, such as cash flow management and analysis to keep your business from falling behind on finances and investing in the correct locations. Outsourced CFO services can also improve your visual appeal with investors and board members by clearly highlighting your financial stability and the strength of your financial strategy. They will do so with data analytics and business intelligence. 

Learn more about data analytics by visiting our Why Data Analytics Is Important for Business blog.

How Long Does a Fractional or Outsourced CFO Agreement Last?

Hiring an outsourced or fractional CFO typically centers around a specific time period. These services are often fractional and they are not structured as an in-house employee contract. Companies might offer their services for monthly subscriptions. They might also structure an agreement for six months since it typically takes some time to generate results. 

As a small business, it’s understandable why you would approach an outsourced CFO contract as a short-term arrangement. However, starting fractional CFOs is most likely to yield the most results when you stick with them for longer periods of time. It takes a substantial amount of time to identify operational efficiencies, generate the correct KPIs, analyze the data, and input strategies, and analyze results. It can be difficult to understand how your fractional CFO fits within six months. That’s why it’s important that you use one with extensive experience in your industry. 

What Factors Influence How Much an Outsourced CFO Cost?

A number of factors influence how much your outsourced CFO will cost. Below, we detail some of those factors:

The State of Your Accounting

Your current financial state will determine a large portion of how much it costs for an outsourced CFO. If you already have a solid accounting department in place, an outsourced CFO will likely cost less than if you need numerous adjustments. 

Existing Software

Depending on your accounting needs and how much data analytics you want to utilize, your outsourced CFO will cost more. The more advanced your accounting infrastructure and software suite, the more resources and analysis they will need to monitor that software.

Your Company’s Complexity

Your company’s size and complexity will also influence the cost of your outsourced CFO. The larger and faster-growing your business is, the more complex your business’s financial needs. This might influence the hourly rate for your outsourced CFO. 

The Extent of Services Needed

Depending on the complexity of your company’s financial needs, it might need more attention. More attention means more hours and more hours means higher costs. If you only need basic outsourced accountant services, your cost will be less expensive. 

Bottom Line- How Much Does an Outsourced CFO Cost?

How much your outsourced CFO costs depends on a multitude of factors and should be tailored to your specific needs. At Fully Accountable, our fractional CFOs can help you identify the strategies that fit your company’s needs best. 

Whether you’re a small or large company doesn’t matter. We can implement systems that improve your company’s financial efficiency with the latest technology, data analytics, business intelligence, and proven strategies. 

Stop trying to do everything at once. Let a financial professional take the question of cash flow off your hands and start scaling effortlessly. You have your brand to focus on. Leave the finances to us.

Contact us today for a free consultation to see how an outsourced CFO can streamline your company’s finances.

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