CFOs are valuable, but they’re also expensive. In fact, for a full-time, salaried CFO, you can expect to pay just under $140,000 a year. Add in the additional secondary costs, such as paid leave, insurance benefits and sick days: that significant sum simply grows larger.

But here’s your silver lining: you don’t have to pay a CFO salary to get the expertise of a CFO.

Read more: The Modern CFO: What business leaders need to know

 

Ready to upgrade your business? Here’s how:

Part time CFO

Your small business probably won’t need a full eight hours of attention from a full-time CFO every day. You may only need assistance during a particularly tricky business event, such as a merger, or need a CFO active only one day a week to knock your business into shape. This is where a part-time CFO can help.

With a part-time CFO, you are only paying them for a short period, or for only a few days a week. As a result, your expenses won’t be nearly as high. If you need them more often, you can scale up, or transfer to a full-time CFO once you’ve hit the $10 million mark.

There are some downsides though. You’ll often miss out on the long-term benefits of a full-time CFO, such as cultural change and mentorship, but you will get your main pain points covered. That is usually enough for a small business. 

De facto CFO

De facto CFOs are extremely common. In fact, you’ve probably already got one. There’s an easy way to spot them: they are the person, usually a C-level executive, normally the CEO, who is handling everything that you want to give to a CFO instead. They are the chief financial officer in all but name.

De facto CFOs are extremely common. In fact, you’ve probably already got one. 

This can be fine for a small business if you already have a bookkeeper or an accountant handling the ‘coalface’ of your finance. But there will usually come a tipping point when the CEO is either too busy performing their primary role to deal with the finances, or the business may become too complex for them to handle alone.

A de facto CFO is cheaper than hiring a CFO, part time or otherwise, but as soon as they run out of time or experience, they (and by extension your company) can start to suffer.

Virtual CFO

Virtual CFOs are a new breed, an extension of the growing number of start-ups and small businesses in the modern world. In essence, a virtual CFO performs all the same finance and strategy duties of a regular CFO, only remotely rather than in person. They also cost a lot less: on average, about half the cost of a full-time, physical CFO.

This is because virtual CFOs are, more often than not, a team of experts rather than a single person, and they aren’t hired directly by your company. Rather, they are outsourced assistance. That means you don’t have to pay that six-figure salary, nor deal with all the additional costs of hiring and regulating a normal CFO such as annual leave, sick days and benefits.

Furthermore, with a virtual CFO team, you get a set of experts with a wide skillset: no need to pay extra for a specialist when a regular CFO reaches the end of their tether. You can scale your virtual CFO as well, in much the same way as a part-time CFO, and they can fulfil as many or as few roles as you need.

Summary

Full-time CFOs are expensive, but there are plenty of other options available for your small business.

If you’d like to find out more about your options, including a virtual CFO service, check out our free ebook below.