When your organization decides it’s time to bring in a new chief financial officer, is it better to hire a virtual CFO or an in-house CFO?
When many companies think of CFOs, they default to the expectation of a long-term hire requiring an office, six-figure salary, bonuses, and benefits. However, a virtual option exists which brings the high-strategy expertise to a company without the same level of commitment and expenses.
A Virtual CFO is a fractional/part-time CFO who works remotely. This option provides companies with the same high-level strategy and experience as a top-level, in-house CFO, but without the associated costs.
10 Benefits of Hiring a Virtual CFO vs an In-House CFO:
Many benefits of hiring a Virtual CFO vs. an in-house CFO are related to cost. However, many companies are surprised that Virtual CFOs are uniquely positioned to have more diverse and concentrated experience than their in-house counterparts.
1. Less Expensive
A virtual CFO is less expensive than the salary of an in-house CFO with similar experience. A virtual CFO doesn’t require benefits or bonuses. Where an in-house CFO will be a full-time salaried employee, virtual CFO pricing will be based only on the amount of time/deliverables your organization needs.
2. Multiple Industry Experience
Virtual CFOs have the unique experience of working with multiple industries at any given time. While the CFO organization you work with will pair you with a CFO who has significant experience in your specific industry, your CFO will also have experience in other industries as well. This provides an opportunity for multilayered insights and networks that you might not have otherwise had.
3. Benefiting from a TEAM of CFOs
If you hire a virtual CFO that is part of an outsourced CFO team or organization, then you’re getting the expertise of not only that CFO but also of the CFOs he or she works with. While you’ll most likely have a single touchpoint at the CFO organization, you’ll benefit from the expertise of all the CFOs in the organization.
4. Standardized Reporting and Formatting
While most CFOs, Controllers, and Bookkeepers bring some of their own preferences or style into how they format documents, files, or reports, a virtual CFO is more likely to have adopted the most widely accepted best practices for generating and formulating client reports and deliverables.
5. They’ll Fit Right Into your Existing Team
Virtual CFOs have worked with dozens of different personalities—often simultaneously. They know how to bring financial expertise to an existing team without ruffling feathers or egos. Expect a CFO who knows how to bring about change without causing contention in the organization.
6. Rich Network
Most CFOs have been in the industry long enough to have a robust network of key individuals and organizations for you to leverage from, such as financiers, lenders, and other experts. A CFO who is part of a virtual CFO team has not only his or her contacts, but also has access to the network of the rest of the CFOs on their team. That means if you are raising funds or expanding into new geographies or products/services, your CFO will know some people who may be able to help you get off to an even better start.
7. Credibility in the Industry
When a CFO has proven themselves time and time again, they gain clout and credibility in the industry. When you consider an outsourced CFO, they’ll likely have solved more challenges and raised more funds for more organizations than an in-house CFO who has worked at the same organization for many years.
8. They Can Handle Any Challenge You Throw at Them
When it comes to virtual CFOs, they’ve “been there, done that,” for nearly any challenge you could throw at them. They’ve worked with organizations of all sizes, industries, stages of growth, and stages of disarray/emergency. If they haven’t faced a certain issue before, then you know one of the CFOs in the organization has and can bring a tried and true solution to the table.
9. Hand-Offs or Changes Go Smoothly
When you hire an outsourced CFO organization, it’s unlikely your CFO will change during their tenure, but if a change does occur—at your request or because of an update at the outsourced CFO organization—then the transition will be quick and painless. An outsourced CFO organization already has multiple CFOs in the wings who are likely apprised of the details of your organization and can easily transition into the CFO position.
10. There’s a Smaller Learning Curve
You’re probably aware of the general expectation that new employees will typically take 6-12 months to get up to speed and perform at their maximum capacity. With a virtual CFO, they have so much experience entering organizations mid-process that they always hit the floor running. Virtual CFOs can very quickly assess the current situation and begin putting actions in place to resolve challenges and achieve goals.
Can a virtual CFO help you overcome your business challenges and partner with you to help you achieve your organization’s potential? Contact Preferred CFO today to speak with one of our experienced outsourced CFOs.