February 6, 2024
A CFO, Chief Financial Officer, is one of the most important roles in an organization. This role serves as the right-hand person of the business owner, or the CEO, Chief Executive Officer, to lead the organization to success.
What’s special about the role of the CFO is that this person manages all the financial matters of a company, which is arguably the most vital part of a company. It’s more than just paying bills. It’s about how to optimize the allocation of financial resources to maintain the operations of the company, and how to utilize these resources to create growth opportunities for the company. Everything a company does has something to do with money, and all decisions that a CFO makes can have a huge impact on a company’s success.
Every company should have a CFO, or someone who holds similar responsibilities. However, not every company has one or can afford one. It’s very common for the business owner or a founder of small start-up companies to act as the CFO, among many other roles. Not only do these companies not have enough funding for a full-time CFO, but the scale of operation is usually so small that having a full-time CFO is an overkill.
Some companies have a full-time CFO, or at least they think they have a CFO, but the person in the role is more like a Controller, or accounting manager role.
They are not performing value-added activities that a CFO should perform. And most of the time it’s not their fault, since they don’t realize what value-added activities look like, and they don’t realize how that value could make a big difference in the company’s financial health. A full-time CFO also can’t help but have to deal with a lot of administrative tasks, such as insurance renewal and HR matters that are needed, but not value-added to the company.
Furthermore, hiring a full-time CFO is an expensive investment. According to Salary.com, the median salary for a CFO in the United States is $362,030, and the median total compensation package (including salary, bonus, and benefits) is $506,386. For a start-up or small business with less than $1 million in revenue, that’s a massive financial burden.
But how can a company receive value-added financial advice without having to put in such a huge investment for such a role?
And here comes the role of a virtual CFO!
A Virtual CFO, also called a fractional CFO, is a person or a company that offers the value of a CFO without being a full-time employee of a company. A virtual CFO typically serves as a consultant and delivers their services virtually (without having to be on-site). He or she oversees the financials of the company and has regular meetings with the business owner and other key executives of the company to discuss financial strategies, develop financial forecasts, and provide financial guidance.
At Elevate, we understand the need for small businesses to get value-added financial advice without the financial burden. We offer layered services to fit the needs of different sizes of businesses. The average cost of our service packages is $80,000 per year.
Does your business have a full-time CFO? Do you think you will benefit from Virtual CFO services?
Wanna know more about our Virtual CFO services? Check out our Service options, or schedule a free 1-hour consultation.
Frequently
Asked Questions
We’ve got the answers to all your questions
What's the difference between an accountant and a fractional CFO?
Think of accountant as your driver. They do the majority of the backward-looking data capture, and make sure your data is complete, accurate, and compliant. Think of your Fractional CFO as your GPS, we help you align the data with your goals, and guide your business towards the right direction via forward-looking forecasts and strategies.
How do i know my business is ready for a fractional CFO?
Your business may be ready to hire a fractional CFO when
- it's fast growing, but your cash flow is not keeping up with the growth
- You would like to expand your business, but not sure if your financials or operations are ready
- You are getting to a stage (typically $3M+) where your operations are complex enough that you need more insights into the performance of various departments.
- it's fast growing, but your cash flow is not keeping up with the growth
- You would like to expand your business, but not sure if your financials or operations are ready
- You are getting to a stage (typically $3M+) where your operations are complex enough that you need more insights into the performance of various departments.
How do i know you understand my family business?
Elevate has worked with multiple family businesses in the manufacturing industries. We understand the unique dynamics in a family business that are both exciting and delicate. Every business is different, and we strive to work closely with you to understand those differences and offer the services that are best suited for your business.
What does a fractional CFO do?
As your fractional CFO, we align your financial data with your business and personal goals. We reverse engineer your goals to actionable strategies and develop measurable insights for the progress. We also connect the dots between the numbers and your operations, to identify opportunities for process improvement, which then lead to better efficiency, better profits and cash flow.
What industries do you specialize in?
At Elevate, we focus on helping family-own manufacturing businesses between $3M and $30M in revenue.
How do you charge for your service?
After we have a discovery call with you and understand your business and your pain points, we create a custom service solution that fit your needs. All fractional controller and CFO services are charged at a flat monthly fee for the agree-upon scope. No time-tracking, and no hidden fees.
