If you’re researching virtual CFO costs for your business, you’re likely wondering how much an outsourced CFO actually costs compared to a full-time hire.
As providers of outsourced CFO services in since 2015, we frequently hear this question from Perth business owners – and the answer isn’t always straightforward.
It will likely come as no surprise that the cost of a virtual CFO can vary significantly based on your business needs, from basic financial oversight to comprehensive strategic planning.
While we can’t give you exact answers that will apply to every business, we can draw on nearly 20 years of operating in this industry to provide you with the most comprehensive overview possible.
So, without further ado, let’s break down what you should expect when considering the investment in outsourced CFO services.
What is the Average Cost of an Outsourced CFO in Australia?
On a one day a week basis, an outsourced CFO may cost around $60,000 yearly ($5000 monthly). Comparatively, a full-time CFO may cost between $200,000-$250,000+ yearly ($17,000+ monthly).
This is a large part of the appeal that a part-time CFO has to offer. A full-time CFO is a substantial overhead cost for companies, and the return on investment cannot always compete with the cost of a part-time option.
Comparison of CFO Costs in Australia
Depending on the size, expertise, and offerings of the outsourced CFO company you are working with, you will be met with a different average price point. While we’ve placed an estimated cost at $60,000, there will be a range both above and below this throughout the industry.
Below, we’ve compared and contrasted the full range of costs, so you can understand how outsourced CFOs are priced across the industry.
Lower-end outsourced CFO costs ($1,000 – $3000 monthly)
Usually run as a “one-man show” those on the lower end of the cost spectrum will typically have limited staff and overhead, allowing them to price competitively.
This can be a good option for smaller businesses that are looking to gain expertise and financial insight at an affordable rate. When you’re interested in making only a small investment into your company’s finances, and are not tackling anything overly complex, this can be a very promising solution.
The potential drawback here is that with smaller virtual CFO businesses, the experience is limited compared to a team with diverse backgrounds, which can combine experience across industries. This means that it may not be well suited to your needs if you are handling very complex financial procedures, operate in a niche or difficult industry, or require highly specialised knowledge.
Mid-range outsourced CFO costs ($4,000 – $12,000 monthly)
In the mid-range you find an extensive range of virtual CFO services, each operating at a different level of output and quality. Typically, these companies will offer more than a “one-man show” with a team that has a diverse range of experiences and skills to pull from.
Analysing the value of outsourced CFO services in this price range can be difficult. Depending on how the company is structured, you may find that you are overpaying for little experience or receiving a bargain on value. At Your Financial Controller, we try to keep our overheads low, allowing us to provide you with great pricing at a high quality.
To assess whether you’re receiving value for money, consider:
- The experience of the team – Sometimes even a dozen decades of experience isn’t enough. At Your Financial Controller, our team has over 300 years of combined experience.
- The diversity of the team – You want a team that knows your business and industry, by hiring a team with diverse backgrounds, you’ll receive stronger analysis and insights.
- The company’s business ethos – When it comes to an outsourced CFO, you want a part-time hire, who cares about your business full-time.
Upper-end outsourced CFO costs ($12,000+ monthly)
The upper end of the spectrum is where you can find yourself overpaying for virtual CFO services, as high costs can often reflect high overhead costs in the company rather than a high level of output. Of course, this is not always the case, especially if your business requires a significant amount of support on a weekly basis. That’s why proper due diligence is key to ensure you’ve made the right decision for your business.
When evaluating CFO services on the upper-end of the spectrum, ensure that you can trust the company you hire with a thorough assessment of their expertise and skill.
Full-time CFO Costs
Outsourced CFOs are popular because they are a great way to realise the benefits of a full-time CFO, without the hefty price tag. The salary of a full-time CFO can be anywhere from $200,000 and often won’t return the same level of financial strategy as a part-time CFO could at a fraction of the price.
As outsourced CFOs are laser-focused on financial improvement, you end up with exactly what you pay for. Whether that’s improving profitability or reducing risk, by working on a part-time basis, outsourced CFOs ensure that they are there when you need them, not more or less. Allowing you to unlock full-time expertise, without the full-time price tag.
Variable vs. Fixed Costs
A popular reason to choose an outsourced CFO over a full-time CFO is that part-time CFOs can scale with your business. This is perfect for small businesses who want to keep overheads to a minimum to protect their profits, but recognise the need to engage specialist help to grow.
“One of the errors some SME owners make is to create a ‘full time corporate people structure’ without the revenue and profitability to pay for it.”
– Kevin Mackmin, Managing Director of Your Financial Controller.
With most outsourced CFO agencies offering adaptive pricing models, outsourced CFOs can increase their level of involvement during peak times and decrease their costs during low periods.
The outsourced option also reduces the impact of additional employment costs such as bonuses, super, payroll tax, long service leave, sick leave, annual leave and training.
On the other hand, full-time CFOs typically work best in large-scale enterprises (LSEs), multinational corporations (MNCs) and blue-chip companies, where it is a reasonable expectation that the business will require a high level of full-time financial leadership, regardless of the time of year.
Associated Costs of Outsourced CFOs
Outsourced CFOs will often be contracted on an ongoing basis for a set rate on a weekly, monthly, or annual basis.
However, depending on the scope of work, and the outsourced CFO company you employ, there may be associated and additional costs. Below, we provide a quick overview of some of these costs, so you can know what to expect before hiring.
1. Setup fees
When hiring an outsourced CFO you may be required to pay one or more fees related to the setup of your account. These fees can include:
- An initial assessment fee to review and analyse your company’s current finances.
- Data clean-up costs which may be applicable depending on the state of your existing financial records.
- Systems implementation if there are unexpected financial software or system setups required.
2. Software subscriptions
If your company uses specialised software specific to your industry or business that is required for financial analysis then you may be required to pay for the subscription of your part-time CFO. This software can include:
- Financial management software
- Business intelligence tools
- Cloud-based accounting platforms
3. Specialised services
Depending on the outsourced CFO company you work with, you can be charged a flat hourly rate, a cost per package, or a combination of both. If you are looking for specialised project-based work, you may find that there is an additional price tag attached.
Tired of Estimates? Know Exactly How Much an Outsourced CFO Would Cost You
Our team has over 300 years of combined experience, has helped over 60 Western Australian businesses and is committed to charging a fair price. We keep our overheads low so we can charge our clients a price that reflects the true value of our outsourced CFO services.
If you’re looking for a quote on your outsourced financial services, the best answer won’t be on Google. Talk to our team and get a personalised quote today.