You’re hiring carefully, scrutinizing costs, and trying to maintain a runway that’s long enough to withstand a downturn without sacrificing growth potential.
And with so many competing priorities, it’s natural to wonder:
“Do I really need a CFO? Or can this wait?”
It’s a reasonable question. Expert financial leadership is often seen as a luxury, something only VC-backed companies or big-budget teams can afford. But when you look closely at what a CFO can accomplish, that assumption is worth questioning.
Good CFOs pay for themselves – often many times over.
Let’s explore how.
When Every Dollar Counts, It’s Hard to Know Where to Put Them
This year has been a whirlwind.
Tariffs threw a wrench into the economy, the S&P 500 dropped by ~20% early on in the year, and now crucial Bureau of Economic Analysis reports have been delayed or cancelled outright.
And when times are uncertain, investments can feel like a gamble.
- Hire engineers? Or invest in marketing?
- Add a new product line? Or wait another year?
- Take a calculated risk? Or hold off on major investments until things are clearer?
But as our director of business development, John Rickard, discovered, what CFOs do isn’t often clear. Before deciding it isn’t time for a CFO’s help, let’s explore what separates them from other financial services.
How Is a CFO Different Than an Accountant or Bookkeeper?
The simplest explanation is CFOs are thinking about the future — two, three, or even five years from now — while bookkeepers and accountants work through what’s already happened.
Still not clear?
Think of a car:
- Bookkeepers and accountants keep the tank full and maintain the engine: categorizing transactions, paying bills, processing payroll, and making sure you don’t stall out on the road. They’re tacticians, focused on the day-to-day.
- CFOs are drivers. They know how long you can go before refueling, map the most efficient routes, and think up ways to get better fuel efficiency. They help you avoid traffic jams (cash crunches), dead ends (bad investments), and when the time is right, make sure you can sell your car for everything it’s worth.
If you’re working in the present or near-present, you’re looking at accounting and bookkeeping. But if it’s prospective — strategy, scenario planning, or anything involving banks or investors — then we’re talking about a CFO’s domain.
Where CFOs Create ROI
It’s no secret: top talent can cost top dollar. Fractional CFO services (like ours) cut down on costs, but a full-time CFO can command hundreds of thousands of dollars a year in salary.
So, where’s the return?
Here are some examples.
Increasing the “Value” of a Company Overnight
We recently worked with a company out of South Carolina. And without changing any fundamental piece of how their business operated, tripled its value overnight, and helped the owners enjoy their retirement.
They started as a small family business selling home alarm systems, but grew quite a bit more than they ever could’ve hoped: from a few hundred thousand to $12 to $14 million annual revenue over a handful of years.
However, they were working 60 to 80 hours a week, wanted to hire help and enjoy the fruits of their success, but weren’t sure if they had enough cash in the bank to cover their expenses.
That may seem unusual — given their success — but with more revenue comes greater overhead, and it’s not always clear if next month’s receipts will cover everything.
When our fractional CFOs dug in, we discovered three things:
- They were managing their finances like a household, rather than a business. Cash only counted when it landed in the bank.
- They built the business installing home alarm systems. Each project brought in a large amount of up-front revenue, followed by a trickle over time from multi-year monitoring subscriptions.
- But since they were managing finances like a household, they were trying to “stay afloat” by selling install packages, while grossly undervaluing the subscription revenue they’d built up.
With our guidance, they shifted from tracking their finances like a household to a business — and once they saw how much revenue they could count on from their subscription business — solved their dilemma. They took their new and improved books to investors, got the financing they now knew they could afford, hired help, and enjoyed the freedom they deserved.
Preventing Problems Before They Happen
A SaaS founder believed they had 6+ months of runway. It was a reasonable assumption, but they’d forgotten to account for seasonality in their forecast, and were about to compound the issue by hiring a salesperson who would’ve taken longer than six months to recoup their investment.
But with our help, we put together a rolling cash forecast that showed a liquidity crunch coming much sooner than they expected. By catching it early, we helped them avoid emergency high-interest debt and/or a forced equity dilution.
Think about it. Could you afford to hire a salesperson? Or how about an entire team?
See for yourself with our free financial forecasting template (no email required). It’s a high-level plug-and-play spreadsheet that’s easy enough to digest in a few hours, but still detailed enough to be useful.
Correcting Underpriced Products
Not long ago, one of our CFOs reviewed a company’s SKU-level data and spotted something interesting: their best-selling product was potentially priced a bit too low.
Just $1-3 off.
On paper, it doesn’t seem like much, but the company was selling hundreds of thousands of units a year. A tiny change wouldn’t hurt demand at all — customers already showed a willingness to pay similar prices for a competitor’s product — while that small adjustment translated into hundreds of thousands in additional annual revenue.
No new marketing, no new hires, just a little bit of expert insight.
How Much Does a Virtual CFO Cost?
Keep in mind, every CFO engagement should come with justifiable ROI. These aren’t prices, they’re investments.
Virtual – or fractional – CFO support can vary, but it’s undoubtedly cheaper than the ~$440,000 annual salary of full-time help.
They can cost as little as a few thousand dollars per month for light-touch guidance, or more for cases where a larger engagement is necessary.
Our clients commonly pay between $1500 and $10,000 per month, depending on the complexity of services required. Here are a handful of common pricing arrangements:
- Hourly rates: $200-$700
- Day rates: $1,000 – $3,000
- Monthly retainers: $5,000 to $20,000
| Related: How Much Does an Accountant Cost? |
What Types of Companies Benefit the Most?
Depending on your situation, you may be better off starting with bookkeeping or accounting-level support. It can be helpful to speak with a representative about the particulars of your situation before deciding.
However, here are some common scenarios that businesses reach out to us for help with:
- Businesses that need short-term help preparing for fundraising
- Organizations undergoing rapid change, such as an acquisition, expansion, or restructuring
- Their full-time CFO has stepped away, and they need interim support until they find a suitable replacement
- Startups with between $1M and $20M revenue. They’re large enough to benefit from long-term planning, but still too small to justify a full-time hire
Curious to learn more? Reach out for a free consultation. We’d be delighted to learn more about your company, goals, and long-term vision.
