Outsourced CFOs for Your Small Business: Assessing Your Options

Published by Matt Brady | May 9, 2022

Managing the financial aspects of your company needs an expert’s touch. While you can use DIY solutions like QuickBooks, these are only effective when you have someone who understands business accounting terminology and process guidelines. You could hire a full-time chief financial officer (CFO) as a salaried employee. However, this may be outside your budget, especially if you’re a smaller business or you’re focusing your budget on specific critical initiatives, such as a particular marketing campaign or asset acquisitions.

This dilemma is why many companies outsource their financial requirements to a third-party certified public accountant (CPA) or consult with an outsourced CFO who’s there when you need them. According to ZipRecruiter, the average salary in America for an in-house CFO is $143,918. Of course, that salary only represents around 70% of what your company would actually pay. You have to take into account: 

  • Health benefits
  • Retirement or pension funds
  • Business equity
  • Bonuses and incentives
  • Vacation time and other time off (e.g., parental leave)

With that in mind, it’s no wonder companies are making the smart decision to connect with an outsourced CFO. Plus, a salaried CFO may leave, retire, or have their contract terminated for various reasons, providing yet another opportunity to work with an outsourced financial expert. Did you know there are several kinds of CFO you can work with? Let’s look at the key differences between a full-time CFO, an interim CFO, and even a virtual CFO.

Virtual CFO

Pew Research recently reported that around 59% of Americans who can work remotely do just that. The pandemic has restructured the working population with technologies like Zoom, Skype, and Microsoft Meetings, which help companies stay connected with their employees, no matter where they are.

It comes as no surprise that the virtual CFO is a financial expert with whom you consult who never or rarely visits your premises. You conduct your business with them remotely. A virtual CFO may act as a consultant, charging a set rate for advice on financial considerations, such as taxes or purchasing. You could also set up an agreement to keep a virtual CFO on retainer, so you always have someone on hand to help with accounts, strategic transactions, or reviewing investments. A virtual CFO can do everything an in-house CFO can do. You simply have to take the time to connect with them using phone, email, or VOIP technologies.

Interim CFO

If cost is an issue with hiring a financial expert, an interim CFO can be a potential solution. Like many industries, accounting has professionals you can temporarily hire through an agency or a dedicated provider of outsourced financial services. An interim CFO has the same qualifications as a full-time CFO, but they’re only with you for a limited time — usually agreed at the outset of your contract with them.

Interim CFOs are ideal for circumstances such as your own CFO having to leave, retire, take an extended vacation, or be on maternity leave. They can also step in to provide an existing CFO with additional support in financially challenging situations. This assistance can be when your company is going through restructuring or a complex merger. An interim CFO can be either full- or part-time, depending upon your company’s requirements.

Full-Time CFO

A full-time CFO is a financial officer who is on hand throughout your business day, week, month, and year. They handle all the financial dealings, from investments to accounts. Full-time CFOs provide advice on acquisitions and financial security. The surprising news is that your full-time CFO does not need to be a salaried employee of your business.

An outsourced CFO provides several advantages. They are experts in financial security and can bring a wealth of experience from working with other businesses, many of which are in your industry or markets. Outsourced CFOs have an external, unbiased perception of your company. This means they will always make the best decisions based on economic principles — not office politics. They are also highly motivated for your success and growth, providing consistent service with clear communication and excellent advice for your next financial ventures.

For small and growing businesses, BradyRenner is the perfect choice for having the right financial expert on hand. Rather than going through the challenging recruitment process of hiring a salaried expert or worrying about the stress of doing your accounts and other financial administration yourself, you can discuss your exact needs with a qualified CPA. You pay for only the services you need and nothing more. Outsourcing your financial operations is a scalable and modern solution for an ever changing complex business world. Consult with one of our BradyRenner CPAs to find out more or set up an appointment.