Most small businesses do not need a full-time CFO. A full-time CFO in Canada costs $150,000 to $300,000 or more in salary and benefits. But many businesses reach a stage where a bookkeeper and an annual tax return are not enough. That is where an outsourced CFO comes in.
What an outsourced CFO does
An outsourced (or fractional) CFO provides the financial leadership of a full-time CFO on a part-time or project basis:
- Cash flow management and forecasting: knowing when you will run short, when you can invest, and how to time major expenses.
- Budgeting and financial planning: building a budget that ties to your business goals and tracking performance against it.
- Financial reporting and analysis: monthly or quarterly financial statements with commentary on what the numbers mean.
- KPI development: identifying the 3-5 numbers that actually drive your business and building a dashboard to track them.
- Bank and lender relations: preparing financial packages for loan applications, lines of credit, or investor meetings.
- Tax planning: working with your CPA on strategies to minimize tax.
- Systems and process improvement: evaluating your accounting software, payment processes, and internal controls.
What an outsourced CFO does NOT do
An outsourced CFO is not a bookkeeper. They do not enter transactions, reconcile bank accounts, or process payroll. The CFO works on top of clean books, using the data to make strategic decisions.
When your business needs one
- You are making money but always seem short on cash.
- You are growing fast and decisions are getting bigger.
- Your bank or investors want financial statements, projections, or a business plan.
- You are spending too much of your own time on finances instead of running the business.
- You have a bookkeeper but no one reviewing the books or analyzing trends.
- You are planning to sell the business in the next 2-5 years.
What it costs
Outsourced CFO services in Canada typically range from $2,000 to $7,000/month depending on complexity. Compare that to a full-time CFO at $15,000 to $25,000/month. For most small businesses doing $1 million to $10 million in revenue, the outsourced option gives you 80% of the value at 20% of the cost.
How it works in practice
- Monthly: review financial statements, update cash flow forecast, track KPIs, flag issues and opportunities.
- Quarterly: deeper analysis, budget variance review, tax planning check-in with your CPA.
- As needed: bank meetings, lender negotiations, major purchase analysis, strategic planning sessions.
L&R Accounting offers outsourced CFO services for small and mid-sized businesses across Ontario. If you have outgrown your bookkeeper but are not ready for a full-time hire, we can step in.
Geetha Srinivasan, CPA (Ontario), CPA (US)
L&R Accounting Services Ltd.
