Is your ecommerce business growing? If so, you might be experiencing growing pains, particularly in your accounting function. Without the proper bookkeeping for Shopify or your Amazon storefront, you could be generating inaccurate financial statements.
This is where an outsourced CFO comes in, infusing accuracy and thoroughness into your accounting function. In this article, we’ll cover the basics of outsourced CFOs, including the benefits and average cost.
What is an Outsourced CFO?
An outsourced CFO is an independent contractor that provides help in your finance and accounting departments. Outsourced CFOs, also known as fractional CFOs, complete all of the same tasks as in-house CFOs, but on a part-time or as-needed basis.
This saves your organization money on payroll taxes and wages, while still ensuring your business is receiving the necessary help from a trained Amazon accountant. Many CFOs hold credentials, such as a CPA or CFA license.
Outsourced CFOs often have years of experience in accounting and finance, with many candidates having worked as a Shopify CPA or Amazon FBA CPA.
What are the Benefits of Outsourcing for Ecommerce Sellers?
There are numerous benefits of outsourcing your CFO position. For one, if your ecommerce business is just beginning to scale, you might not have the cash flow or need for a full-time in-house CPA. Instead of paying a full-time salary, you can contract an outsource CFO whenever your business needs extra help, such as around month-end.
Additionally, outsourced CFOs bring years of experience with them on complex issues. This gives them the ability to help answer questions like, “Does Shopify pay sales tax?” or “Should I charge tax on Shopify?”
When you have an expert to turn to, your ecommerce business runs smoother. Not to mention that a CPA for Amazon sellers can give you an independent opinion on where your business may fall short and suggest avenues to improve.
Maybe you find that switching suppliers reduces your operating costs by 5% or that investing $10,000 in another product line can increase your profitability by 3%. Working with an outsourced CFO is essential to maximize your profitability and efficiency.
What is the Average Cost of an Outsourced CFO?
The average cost of an outsourced CFO can vary based on the hours worked and experience level. However, the average full-time salary in the United States is around $350,000. Many part-time CFOs charge on an hourly basis.
Let’s say that your outsourced CFO charges $150 an hour and works about 10 hours a month. This equates to only $18,000 per year for access to expert insight and much-needed help. The value you receive in return can help your organization achieve sustainable growth and tailored solutions on financial performance, making it a small price to pay.
What Factors Influence the Cost of an Outsourced CFO?
Each outsourced CFO will have a different pricing structure. Here are some additional factors that can influence the price.
Current Accounting State
If your accounting records haven’t been touched since last year, your outsourced CFO will have more work to get your system functioning properly. Ecommerce businesses that already have an accountant for Amazon sellers or a Shopify accountant can see lower prices if the proper controls are already in place.
Software Used
Ecommerce sellers that use specialized software may have more difficulty finding the right outsourced CFO. In addition, if you are looking for expanded insights, such as KPI tracking, your outsourced CFO will have more work, especially if your current software doesn’t have those capabilities.
Business Complexity
Running multiple storefronts can also increase the cost of your outsourced CFO. When you have transactions flowing into your accounting system from multiple sources, more adjustments may need to be made, such as truing up revenue for sales tax and fees.
Services Needed
Do you need general bookkeeping for Shopify storefronts? How about in-depth Amazon accounting services? The level of services needed impacts how much your outsourced CFO will charge. If you only need help at month-end or year-end, you will have a lower bill compared to if you need weekly assistance.
Summary
Does it sound like your organization can use an outsourced CFO? Although outsourced CFOs can come with a high price tag, they can infuse accuracy, timeliness, and compliance throughout your ecommerce business.
Maybe your outsourced CFO finds a way to increase profitability by 10% or helps your organization grow revenue by 5%. Footing the bill comes with a high value in return.
For more information on outsourced CFO services for ecommerce sellers, reach out to a team member today to learn more.
