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 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.
While these figures are indicative, this gives a good sense of the value you can access with an outsourced CFO in Australia. In many cases the same service is labelled outsourced CFO, virtual CFO, fractional CFO or a part-time CFO, and the difference is usually in the way the service is delivered and the location of the financial officer/s working with you.
Whatever it is called, the cost is driven by the same three things: the number of days a month you need, the complexity of your reporting, and how much strategic work sits on top of the numbers. Every engagement we quote is scoped to your business, with clear, upfront quotes and no lock-in contracts.
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.
Virtual, Fractional and Part-Time CFO Costs: The Same Service, Different Names
If you are comparing virtual CFO pricing, fractional CFO rates or part-time CFO costs, you are usually looking at the same service under a different name. In Australia the terms are used interchangeably, so the monthly ranges above apply to all three.
Providers price that service in three main ways. A monthly retainer covers an agreed scope for an agreed fee. It is the most common model and the one the ranges above describe. A package price covers a defined set of reports and meetings. A flat hourly rate is usually kept for project work, and some providers combine an hourly rate with a retainer.
There is no CFO salary under any of these models. An outsourced CFO is not on your payroll, so bonuses, superannuation, payroll tax and leave entitlements do not sit on top of the fee. That is the gap between a monthly fee and the $200,000-$250,000+ yearly ($17,000+ monthly) an equivalent full-time hire may cost.
Interim CFO work typically covers the same senior support but over a shorter period, priced as project-based work, so the total depends on how long the engagement runs. For example, you may need only 12 weeks of cover between the previous CFO exiting the business before the new CFO is recruited and onboarded; or, you may be looking for 9-12 months of support to cover for a medium-term maternity leave window. Interim CFO arrangements work well for situations where there is a semi-fixed-term.
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.
Common Questions About Outsourced CFO Costs
How much does it cost to outsource a CFO?
In Australia, outsourced CFO costs generally run from $1,000 – $3000 monthly at the lower end, through $4,000 – $12,000 monthly in the mid-range, to $12,000+ monthly at the upper end. Where you sit depends on the days of support you need, how clean your data already is and how much strategic work you want on top. These are indicative. We scope and quote every engagement to your business, so you know what you are paying for before you start.
How much does a virtual CFO cost?
Virtual CFO pricing follows the same monthly ranges as any outsourced CFO engagement, because it is the same service delivered remotely. As a benchmark, one day a week of virtual CFO support may cost around $60,000 yearly ($5000 monthly). Businesses that need financial oversight rather than full strategic planning usually sit at the lower end of the ranges above.
How much does a fractional CFO cost?
Fractional CFO costs are quoted monthly and sit in the same indicative bands as outsourced and virtual CFO work: $1,000 – $3000 monthly at the lower end, $4,000 – $12,000 monthly in the mid-range and $12,000+ monthly above that. A fractional CFO is a senior finance lead working part of the week in your business, so the fee moves with the days you book and the complexity of the reporting they own.
What is the average salary of a CFO in Australia?
A full-time CFO salary in Australia can start from around $200,000. Once the full cost of the role is counted, a full-time CFO may cost between $200,000-$250,000+ yearly ($17,000+ monthly). An outsourced CFO carries no salary at all. You pay a monthly fee for the days you use, and bonuses, superannuation, payroll tax and leave entitlements stay off your books.
Do outsourced CFOs charge an hourly rate?
Some do. Depending on the provider, you can be charged a flat hourly rate, a cost per package, or a combination of both. Ongoing CFO support is most often billed as a monthly fee against an agreed scope, while an hourly rate tends to apply to project work. Ask any provider to put the rate basis in writing before you engage them, so you can compare quotes on the same terms. We quote a monthly fee against an agreed scope, with clear, upfront quotes and no lock-in contracts.
What size business needs a fractional CFO?
There is no revenue threshold. The trigger is usually the point where a bookkeeper is no longer enough and a full-time CFO is too much. That looks like reporting that arrives too late to act on, cash flow that is hard to predict, a lender or investor asking for forecasts, or a growth decision you would rather not make on instinct. A fractional CFO covers that gap for a monthly fee instead of a salary.
Talk To Us About A Virtual CFO For Your Business Today
If you’re looking for a quote on your outsourced financial services, the best answer won’t be on Google. Book your free consultation and we will walk through your numbers, scope the support you need and quote a clear monthly price with no lock-in contracts.
There’s no obligation and it’s complimentary to help you see what this could mean for your business. Click here to book a call with us today.
