Virtual Chief Financial Officer services enable businesses otherwise limited by geography or budget to tap into a talent pool of top strategic financial advisors. Virtual CFO services, while performed remotely, differ by the type of engagement: project-based, recurring value-based, and permanent part-time.
Types of Virtual CFO Services / Packages / Engagements
Project-based Virtual CFO services are typically tied to a singular event. This could be a business event (ie. post-merger integration, audit, large purchase, refinance, or pricing a new product) or a seasonal event (ie. year-end closing). These services are contracted when in-house resources do not have the expertise or bandwidth to complete these important functions while also fulfilling daily accounting and financial management responsibilities. A company may use the same project based virtual CFO for more than one project, or even over and over but the understanding between the parties is there is no recurring work or expectation of future projects.
Payment Structure: one-time fixed-fee or hourly until project completion
Recurring Value-Based Virtual CFO Services give a business access to shared virtual CFO resources. These engagements are designed to help the business reach financial goals and make accurate data available for decision making. In this option, the CFO resources may not be involved in the day-to-day communication of accounting and finance but will be available during fixed times set and agreed upon each month by both parties. Each month, the Virtual CFO Service provider will deliver agreed upon services, deliverables, and reporting. This could include financial statement preparation, cash flow management reporting, financial operations support, vendor cost/benefit analysis, hiring assistance, comprehensive budgeting, monthly financial scorecards, accounting software training, and more.
Payment Structure: monthly fixed fee (hourly for add-on services outside the scope of engagement)
Permanent Part-Time Virtual CFO services allow a business to either hire or contract an individual virtually, albeit on a part-time basis. This individual serves virtually as an extension of the internal team but is not available during all business hours. This option is ideal for businesses that have grown to need an ongoing, almost permanent CFO-level role, involved in the day-to-day of the business but cannot yet afford to hire a permanent in-house CFO or cannot find local resources. This role, if the goal is to sustain the growing business until it reaches its next milestone, will likely eventually be replaced by the business by a permanent full-time hire.
Payment Structure: part-time salaried or monthly fixed fee (If External Contractor)
Which Type of Virtual CFO Services Do I Need?
Think through the below considerations to determine the best Virtual CFO Service engagement for your business.
The #1 Virtual CFO Services Type Consideration: Financial Health or Injury?
The engagement type that you select all boils down to one question: are you seeking virtual CFO services to treat an acute ‘injury’ or to improve and keep up the business’ overall financial health? A business seeking CFO services for financial health will want to either engage a Recurring-Value Based Virtual CFO Service or will need to find a Part-Time Permanent CFO. On the other hand, if you have a transactional need (ie. a refinance, merger or considering a new business line) a Virtual CFO Service that provides project-based help could be the right fit. In some cases, what might seem like an acute injury treatment (cash flow issues last month) may be intrinsically linked to overall health. Engaging a Virtual CFO Service Provider can help you to unpack whether your current challenge is an ‘injury’ or best solved by looking at overall financial health.
Current Staffing Structure
When hiring a Virtual CFO, the best bang for your buck will come from leveraging these services for strategic business vision. While many CFO packages may offer accounting services baked in, if you have in house accounting staff, it may be better to leave the accounting daily ‘to-dos’ to your own staff and have the virtual CFO service provide oversight and insights via reporting. This will ensure that all your financial data is accurate and that you are making business decisions based on good data, while making sure that the higher rates paid to a Virtual CFO are reserved for strategy.
However, if you are a small business with no accounting staff at all, it might be worth hiring a Virtual CFO Services firm to manage both your accounting function and support you with strategic direction. Instead of trying to manage something in which you do not have the expertise and multiple vendors separately for accounting and strategic financial help.
- A small business needing a few hours a month of support with strategic financial direction may opt for a Recurring Value-Based Virtual CFO Service. This service model provides the flexibility to right-size the engagement vs. a permanent part-time hire or contractor which would require a larger monthly commitment not only in terms of payment but also in terms of time to manage the engagement or individual.
- If you are a large business that needs to temporarily scale up for seasonal projects that full-time staff can’t handle, project-based fixed-fee or hourly Virtual CFO Services are likely the right fit.
- If your business is growing and almost at the point of needing a full-time CFO, but the CFO salary is not in the budget, a permanent part-time hire or consultant is likely the right fit.
If your business is growing and almost at the point of needing a full-time CFO, but the CFO salary is not in the budget, a permanent part-time hire or consultant is likely the right fit.
Virtual CFO Services Pricing
Virtual CFO Pricing starts at about $500/mo. for a value-based service provider and can cost $2500/mo. or more for a more comprehensive service with unlimited support and analysis. View our Virtual CFO pricing and services chart to learn more.
Still not sure what Virtual CFO Services you might need? Schedule a Virtual CFO consultation today to get professional support with this important decision.