--- title: "Virtual CFO Services 101: Costs, Benefits & Drawbacks" description: Virtual CFO Services are popular these days. Learn why companies are turning to this solution, what you can expect to pay, and what the advantages and drawbacks are. image: https://www.ignitespot.com/hubfs/outsource_cfo_services.jpg --- Call us at[1-855-694-4648](tel:1-855-694-4648)             [![squareyoutube_copy](https://www.ignitespot.com/hubfs/2021_IgniteSpot/YOUTUBE.png "youtube")](https://www.youtube.com/channel/UCimfeJCvdyYVasnJCdMQhsw) [![facebook](https://www.ignitespot.com/hubfs/2021_IgniteSpot/FACEBOOK.png "facebook")](https://www.facebook.com/ignitespot/) [![IgniteSpot_logo](https://www.ignitespot.com/hs-fs/hubfs/2021_IgniteSpot/IgniteSpot_logo.png?width=187&height=72&name=IgniteSpot_logo.png "IgniteSpot_logo")](https://ignitespot.com) [![IgniteSpot Logo](https://www.ignitespot.com/hs-fs/hubfs/2021_IgniteSpot/IgniteSpot_logo.png?width=187&height=72&name=IgniteSpot_logo.png) ](https://www.ignitespot.com/) Menu ☰ # Virtual CFO Services 101: Costs, Benefits & Drawbacks [FINANCIAL STRATEGIES](https://www.ignitespot.com/blog/topic/financial-strategies), [CFO SERVICES](https://www.ignitespot.com/blog/topic/cfo-services) | September 6, 2018 | By [Eddy Hood](https://www.ignitespot.com/blog/author/eddy-hood) ![Virtual CFO Services 101: Costs, Benefits & Drawbacks](https://www.ignitespot.com/hs-fs/hubfs/outsource_cfo_services.jpg?width=960&length=960&name=outsource_cfo_services.jpg) **** **** **** **** **** **** To everything there is a season. There's a time to weep and a time to laugh, a time to mourn and a time to dance, a time to hire a CFO and a time to avoid one like the plague. Your business does need a CFO, but at the right time and with the right parameters. In this article, I'm going to cover what you need to know about [virtual CFO services](https://www.ignitespot.com/cfo-services) before you make the move. # What are Virtual CFO Services? ![virtual_cfo_services-1](https://www.ignitespot.com/hs-fs/hubfs/virtual_cfo_services-1.jpg?width=1000&name=virtual_cfo_services-1.jpg) Photo by [Martin Sattler](https://unsplash.com/photos/mBz6QjRZKvc?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText) on [Unsplash](https://unsplash.com/search/photos/focus?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText) A CFO (Chief Financial Officer) has an accounting background. He or she can be a CPA (Certified Public Accountant) but it's not necessary. A hallmark of a good CFO is a strong track record of building wealth within companies. A CFO's purpose is to do one thing only: > **Increase shareholder value** Their job is to make the company and everyone involved more wealthy. A CFO does this by improving profit margins, working with operations managers to get more with less, building cash flow strategies and more. This person also works with your banks and investors to manage capital and key financial relationships. ## What do CFO Services Cost? ![cfo_services_costs](https://www.ignitespot.com/hs-fs/hubfs/cfo_services_costs.jpg?width=300&name=cfo_services_costs.jpg)Photo by [Hello I'm Nik](https://unsplash.com/photos/z1d-LP8sjuI?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText) on [Unsplash](https://unsplash.com/search/photos/growth?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText) If you hire a CFO as a full-time employee, plan on paying a lot. A good CFO will require an annual salary of $150,000 to $250,000 minimum. CFOs for large enterprises can make much more than that as a base salary and they are often bonused off of company profits or success as well. If you use an [Outsourced CFO Service](https://www.ignitespot.com/cfo-services), you will likely pay around $200 to $400 an hour for their time. Remember, you're NOT getting a bookkeeper or a Controller here. Those are different accounting roles within a company. Those positions are expected to track what's happening within your business. A CFO is paid at higher rates because he or she is expected to take those inputs and build company wealth with them. So the questions becomes, "How many hours will you need from your virtual CFO each month?" That all depends on your needs.  I suggest at least 10 hours a month to start with. That gives your CFO enough time to analyze the data, build a plan, and consult with you. Anything less and they won't have enough time to understand your business activities. ## What are the advantages of CFO Services for a business? With a CFO on your team, you'll have viable wealth strategies as well as an improved financial and accounting system. **Here's what you can expect from a good Chief Financial Officer:** 1. A cash flow forecast that analyzes how your cash changes over time based on certain business decisions, criteria, and outcomes. 2. A model of your company's profitability along with a strategy for increasing margins over time. 3. A tighter connection between the operations of your company and the financial response to their decisions so that you can get more with less. 4. Managed relationships with your lenders and investors. 5. Increased business and personal wealth over time. ## When Is The Right Time to Hire a CFO? ![hire_cfo_services](https://www.ignitespot.com/hs-fs/hubfs/hire_cfo_services.jpg?width=300&name=hire_cfo_services.jpg)That's a great question. If you get one too early in the game, you'll sink your cashflow due to cost. If you wait too long, you'll miss out on cash flow opportunities over time and your wealth strategy will falter. **Here are some criteria to help you know when it's time: ** 1. You need to raise capital with investors. 2. Or - You have complicated lending requirements with your bank. 3. Or - Your business generates 3 to 5 million + in annual sales and you don't have a strong plan for how to turn that business into lasting wealth. 4. And - You have a decent bookkeeping system in place so that all numbers given to your CFO are accurate and current. ## What are the Disadvantages of a Virtual CFO Service? Regardless of whether you hire in-house or you use a virtual CFO, there can be negative effects to your business. It's really a timing issue. If you're not ready for the CFO, you'll waste precious resources (cash) on a very expensive person. For example, if you hire a CFO before you have a decent bookkeeping system in place, he or she will spend their time complaining about the poor data they are being given. CFO's are NOT likely to get into the books and do data entry and clean things up. You don't want them doing that anyways. They're too expensive for that kind of work. Not all CFOs are created equal as well. Many accountants were put into a CFO role by a previous employer because that employer didn't want  to hire a qualified candidate at the correct salary. I have interviewed many candidates who were clearly bookkeepers that got promoted to the role of CFO. That candidate doesn't stand a chance next to someone that's a CPA, has worked in a major accounting firm for several years, and has cut their teeth building real wealth for real companies. In short, just because their resume says "CFO", don't believe it. You also want to get a CFO that shares your vision for your company. Because they're wired to make the company wealthy (a good thing), they often look only at the numbers and fail to consider other variables. An entrepreneur will dream big, and the CFO can throw a wet blanket on that dream pretty quickly. If you get a CFO that shares your vision, your discussions won't be limited by numbers, they will be propelled by them. Instead of your CFO saying, "Bob, we can't afford that", he might say "Bob, I love that idea. It's not in our projections so let's add it and we can discuss how to make it happen." ## What to Do Next If you feel like your company is ready for a CFO, we can help you with that. We provide[ virtual CFO services](https://www.ignitespot.com/cfo-services) to businesses throughout America. Click the button below for a free consultation with one of our CFOs.  We will discuss your goals as a business, and help you determine if it's an appropriate time to get started. 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