Interested in working with a seasoned CFO but you have a limited budget to hire one? CFO outsourcing might be the solution you’re looking for. Here’s what you need to know before you outsource CFO services.
.jpg?width=1434&height=600&name=_DSC1073%20(1).jpg)
What is CFO outsourcing?
CFO outsourcing is the practice of hiring external chief financial officers (CFOs) on an hourly, part-time, contractual, or as-needed basis.
Outsourced CFOs, who are otherwise known as fractional or virtual CFOs, typically offer high-level accounting services including financial strategy, forecasting, budgeting, and consulting, among others.
Related: The 5 Core Duties of a CFO in Driving Business Growth
CFO outsourcing services are popular among entrepreneurs, startups, and small- to mid-sized businesses due to their cost-efficiency. Larger companies, even if they already have an in-house finance chief, can also outsource CFO services. This outsourced function becomes especially useful when the company goes through major changes, such as business expansions and restructuring.
Are you a CFO who’s looking for outsourced accounting support? Here’s a more suitable guide for you: CFO Support Services to Drive Company Growth this 2025.
Businesses of all sizes can benefit from outsourced CFO services
The CFO is undoubtedly one of the most important executive roles in an organization. That’s why for those who already have an in-house finance chief, the idea of outsourcing CFO services can sound implausible.
‘Why outsource a CFO when it’s a critical function that must be retained in-house?’
But the reality is not all businesses are at the stage that they need a full-time in-house CFO nor have the resources to hire one. And even if it’s not yet an option for you, there may come a time when you’ll need the service of these outsourced financial experts.
The value you can get from outsourcing CFO services depends on the type and size of your business, as outlined below:
1. Startups
CFOs play a critical role in establishing a startup’s processes, especially around governance and compliance. However, startups tend to defer hiring this executive-level position until they are more established or must prepare for an initial public offering (IPO).
Doing so could be a mistake, says Tim Hird, the executive vice president of enterprise optimization at Robert Half.
“They could face significant obstacles that may hinder their future success, whether they are planning an IPO or not,” Hird explains.
But we cannot also deny that most startups have limited funding. In most cases, hiring either a full-time or part-time CFO can burn their capital.
Outsourcing offers a more affordable way to get quality CFO services. This option lets you work with fractional CFOs on an hourly or as-needed basis. Instead of paying a full payroll (along with its associated benefits and government contributions), you’ll only need to pay for the service or package you outsourced
Among the services you may find useful include advisory, budgeting, capital raising, and financial strategy. Some service providers also offer packaged services focused on a specific area such as growth and performance.
2. Small and medium-sized businesses
“The biggest mistake young businesses make with their financial hires is bringing on someone too senior too soon,” states Josh Burwick, an active private technology investor.
Similar to startups, hiring a CFO can put a dent on a small business’s bottom line. It’s a huge investment; their annual salary alone ranges $200,000 to $300,000. This doesn’t include the performance bonuses and possible equity participation and funding/valuation incentives yet.
As such, Burwick recommends getting a CFO as a service, which is a more corporate term used for CFO outsourcing.
“These pros can advise you without a six-figure price tag,” the technology investor added.
True enough, the average cost of a full-time outsourced CFO ranges from $1,000 to $12,000 per month. If you only need their service occasionally, you can opt for their hourly rates that can be anything between $185 and $350.
Working with outsourced CFO companies is not only a cost-effective choice; it’s also a strategic one.
As you focus on your customers and product development, your outsourced CFO can provide you with an objective analysis of your financial health. They can help you assess historical data, make projections, prepare a working budget, analyze financial statements, and guide you in making smart financial decisions.
3. Companies going through various stages
Even if your company already has an in-house CFO, you can still make good use of CFO outsourcing. This outsourced function can act as a supplementary or extended support, especially when your company is undergoing:
- Rapid growth. Outsourced CFOs can work alongside your finance chief in handling critical areas the latter can no longer accommodate.
- Mergers and acquisitions. An outsourced CFO can help you in doing preliminary analysis, reporting, forecasting, and giving objective advice.
- Change in management. If your highest executive finance position is vacated, an outsourced CFO can fill it in the interim. This way, your accounting department can operate as usual.
- Cost cutting. External CFOs can make more objective cost-cutting recommendations due to their extensive experience in working with various industries. They also tend to have no biases since they’re not part of your company.
- Global expansion. Outsourcing a CFO in a country where you plan to expand can make things easier for your company. CFOs from your target location can give you detailed information about the processes you need, including the financial challenges you must be aware of. They can also assist you with tax registrations and other necessary compliance requirements.
4. Private equity firms
CFOs play a huge role in sustainable value creation in private equity (PE) firms and their portfolio companies. They are key players who provide oversight on the PE firm’s financial operations, investor relations, portfolio company onboarding, and even the implementation of advanced technology.
Although the demand for these finance leaders is high, the number of qualified CFOs isn’t keeping up. It’s a bigger concern today as a Great Resignation among CFOs is also taking place. The average tenure of these C-level finance executives is also on a decline, and it’s not good news for PE firms who need long-term high-level financial guidance.
Lower- and middle-market PE firms can feel the heaviest blow as they compete with their bigger counterparts for top financial talent. With outsourcing, PE firms can work with outsourced CFO companies that can provide them with high-level financial services on an as-needed basis or even through extended periods.
A word of advice: The role of an outsourced CFO depends on your current needs and challenges. Thus, the best way to find a service provider is to speak with them directly so you can check if they can provide the services and expertise you need.
What can an outsourced CFO help you with?
Outsourced CFOs offer similar services similar to the ones provided by in-house CFOs. But instead of getting everything at once, you can outsource a specific service like business valuation or profit maximization. You can also find service providers that offer service packages, or a bundle of interconnected services.
Here’s a list of virtual CFO services you can outsource:
- Customer contract reviews
Note that this is not an exhaustive list. To get a more specific list, we recommend speaking directly with your shortlisted CFO firms.
Benefits of outsourcing CFO services
As long as you choose the right service provider, outsourced CFO services can give you the following benefits:
1. Cost-effective
CFO outsourcing is a cost-effective solution for businesses with no in-house finance chiefs.
Through this option, companies who do not have the resources to get a full-time CFO on board can get the expertise they need, whenever necessary.
2. High-level financial strategies
Outsourced CFOs have experience working with multiple clients from various industries.
As a result, they have extensive knowledge about how the market works and how it affects distinct types of businesses — giving them the ability to produce high-level financial strategies.
These strategies can be helpful when you find yourself stuck doing the same old processes that no longer yield meaningful results.
This article from the International Federation of Accountants (IFAC) also sets out the role of CFOs in adding value to an organization.
3. Short- and long-term forecasting
Business and financial forecasts set the direction for your business. However, it requires a tremendous understanding of your business, your financial position and the trends in your industry. Good thing, an outsourced CFO can help you prepare it.
4. Timely compliance
While CFOs are more concerned with management and growth, compliance remains a top priority for any business.
Compliance and financial reporting requirements often change, and businesses experiencing rapid growth need expert advice to ensure that businesses meet the right requirements.
5. Scalable solutions
Outsourced CFO services are adaptive. It means you can start by availing select services only — either on an hourly or part-time basis — and gradually expand as your needs change over time. At the same time, it also gives you the freedom to scale down as needed.
This means that through outsourcing, you can have the flexibility you need to adapt to the ever-changing requirements of your business.
In summary, outsourced CFO solutions can help you adjust your strategies to meet your goals while keeping the expenses low compared to having a full-time CFO on board.
Read next: A CFO’s Guide to Outsourcing Finance and Accounting Services
When should you outsource CFO services?
It’s time to outsource CFO services if you’re experiencing any of the issues below:
- Your financial strategy no longer seems to match your goals.
- You or your in-house accountants are not able to make sensitive financial decisions.
- You need strategic financial expertise for a fixed period.
- You lack the budget to hire an in-house finance executive.
- You need help in managing your in-house accounting team.
- You constantly encounter complex financial issues and no one from your business knows how to address them.
- The business is not performing well as you think it should. An objective third party can help you understand where it falls short and where action is required to turn the business around.
If you checked any of the items above, you may want to consider outsourcing CFO services.
But how can you find the right fit?
How to choose the right CFO outsourcing service provider
To ensure you’re working with a reliable CFO, be on the lookout for the following:
1. Proven industry experience
Each industry has various nuances, especially when it comes to the accounting regulations and requirements they must follow. That’s why when interviewing potential providers, be inquisitive about their experience in your industry.
You may interview them about the clients they’ve already worked with. Asking them for copies of case studies can also help you assess if they’re the right fit for your entity.
2. Service quality
Find a service provider who can deliver top-notch quality service. Look into the expertise of their CFOs, customer service and even tools.
Another practical way to know if a service provider is good or not is by looking at their client testimonials. Conducting due diligence before starting any engagement is also good practice.
3. Accessibility
Your outsourced CFO should be easy to contact and communicate with. Not because they only provide part-time and contractual services does not mean they can give you a substandard level of communication.
Otherwise, it defeats the purpose of outsourcing a CFO to get timely financial insights and advice about your business.
See to it that you ask a provider about their methods of communication, including their average response times.
4. Transparency and accountability
The service provider should be transparent in their hiring processes, workflows, capabilities, and prices. You must also check if their CFOs have the necessary qualifications, experience, and knowledge.
5. Cost of service
Of course, your budget must meet the price tag of an outsourced CFO. When sending an inquiry, you can ask a service provider for a quotation of their CFO services. Just make sure to indicate your complete requirements. This way, you can get a more accurate quote.
Looking for accounting support for your CFO?
D&V Philippines provides reliable and scalable CFO support to help businesses make smarter decisions.
Contact us today or download our latest whitepaper, Outsourcing for CFOs: Premium Finance and Accounting Solutions for Modern Finance Executives, to find out how we can help you in every step of your growth.
This article was first published on 9 June 2020 and has been regularly updated for relevancy and comprehensiveness.
Edited and updated by: Mary Milorrie Campos
Last edited on: 18 March 2025
