Every business needs a CFO but one who has the right parameters and at the right time. If you hire a CFO, you might be required to pay an annual salary of $150,000 to $250,000 minimum. In simple words, hiring a full-time CFO comes with a hefty price tag.
On the other hand, a virtual CFO might help you control costs by getting services only when you need them. However, there is no standard pricing structure for virtual services. Here we look at five factors that matter when determining virtual CFO pricing.
Complexity of Financials
The type of industry, growth, and size of your company play an essential role in determining the price of outsourced CFO services. The more significant your business and the faster your growth, the more complex your corporate financials become.
The CFO has to manage more complicated cash flow and deal with the greater interplay of the system. Also, a larger company means the CFO needs to consider more factors during budgeting and forecasting.
System Design and Implementation
Many times, the current operational and financial systems are inadequate to manage the current level of business growth. In such a scenario, the Virtual CFO might be required to put in new systems in place to support your business growth.
Such activities are generally hands-on where the team from outsourced CFO company plan onsite visits to train staff member and also overlook ERP and other systems implemental.
The intensiveness of the whole process and the higher level of management needed to complete such work successfully causes the prices to rise to a more upper limit.
Diversity of the Services
Virtual CFO offers a wide range of services. Some businesses might need a few while some may need more. Hiring a virtual CFO is all about flexibility where you have the freedom to choose the services you need and pay for it, which helps control costs.
Some of the services that are part of the virtual CFO pricing are maintaining accounting records in accordance with GAAP, financial and operational results analysis, risk and opportunity assessment, improve profitability, budgets, financial and cash flow projections, growth plans, acquisitions, and many more. These financial services are offered as bouquets (where they have lower prices) or individual services, which are marginally expensive.
Depending on the complexity of the accounts, the Virtual CFO may need extra support to implement the financial strategy. For example, the CFO services help to plan and deliver monthly financial packages.
In such cases, it would be inefficient to use CFO services for basic reporting and book-keeping. You can get expert book-keepers and on-staffers to provide these services, which might be included in the CFO services package.
Growth Stage of Your Company
Most CFO services offer transactional value tier to businesses. The transactional value tier depends on the growth stage of your company. These CFO services charge a flat fee based on the annual revenue of the company. e
The higher the annual revenue of the company, the higher the CFO fee charged. The contract mentions the agreed prices and a clear description of the services that will be rendered.
These are the five factors that matter when determining virtual CFO pricing. With Virtual CFO on your team, your company will have an improved financial and accounting system and also have viable wealth strategies without a hefty price tag.