How Much Should I Pay to Replace My VP of Finance?
And other accounting roles, responsibilities and costs:
Employee turnover can be a disruptive and stressful experience for any business owner. Losing a key member of the finance or accounting team can have significant operational and financial consequences. The search for a replacement can be a daunting task, especially when the departing employee takes institutional knowledge with them. This can lead to process gaps and disruptions across multiple departments.
Replacing the departed employee can take months and require extensive training on your company’s operations. Finding the right skill level and culture fit is crucial, and the search process can be time-consuming and costly. Meanwhile, your business must continue running, and the absence of a key finance or accounting team member can cause unnecessary stress and strain.
Assessing the Cost and Value of In-House Finance and Accounting Teams
As a business owner, you may be wondering how much you should pay to replace key finance and accounting team members such as CFOs, VPs of Finance, Controllers, Accounting Managers, Staff Accountants, or Bookkeepers. However, before we delve into that question, it’s essential to determine if it’s the right one to ask. In many cases, small to mid-market businesses may not need a full-time CFO or VP of Finance, but rather require on-demand financial insights.
Before we discuss the benefits of outsourcing, let’s examine the state of the hiring market nationwide. It’s worth noting that the following statistics are based on national averages, and areas such as San Diego, LA, and OC may have significantly higher salary ranges.
Current Average Salaries for Finance and Accounting Positions
Here is a breakdown of the current average salaries for finance and accounting positions in the United States, based on recent data from Glassdoor and the Bureau of Labor Statistics (this is salary information only):
Chief Financial Officer (CFO): The average annual salary for a CFO is around $160,000 to $230,000, depending on the industry and company size.
Vice President of Finance: The average annual salary for a VP of Finance is around $120,000 to $170,000, depending on the industry and company size.
Accounting Manager: The average annual salary for an Accounting Manager is around $80,000 to $120,000, depending on the industry and company size.
Staff Accountant: The average annual salary for a Staff Accountant is around $50,000 to $70,000, depending on the industry and company size.
Bookkeeper: The average annual salary for a Bookkeeper is around $35,000 to $50,000, depending on the industry and company size.
When adding up the total costs of these positions include salaries, bonuses, benefits (15 to 20%), and overhead (computer, office space, etc.), It becomes apparent with the math that hiring an in-house accounting team is a significant investment for any company as it involves recruiting, training, and retaining staff, along with providing them with benefits, bonuses, and salaries.
An Alternative Solution? Outsourcing Accounting Services
Outsourcing accounting services can provide a more cost-effective and flexible solution. By outsourcing these services, businesses can benefit from a range of advantages that can help them overcome the disruption caused by employee turnover and maintain their financial operations.
At Signature Analytics, our monthly retainer typically falls within the range of $5,000 to $15,000 per month, depending on the size of the business and the level of services required. This fee includes a full-service accounting team, including a CFO-level advisor, controller, staff accountants, and bookkeepers.
By Outsourcing Accounting Services, Businesses Can Benefit From:
Outsourcing accounting services can significantly reduce costs for businesses. In fact, outsourcing can save businesses up to 50% compared to maintaining a full in-house accounting team. This is because outsourcing delivers the right person at the right time doing the right job and eliminates the issues of a junior person trying to do work outside of their skillset or a senior person becoming bored doing junior level work..
Outsourcing accounting services provides businesses with increased flexibility. Businesses can access a range of accounting services based on their specific needs as they grow and change. This includes basic bookkeeping, financial reporting, audit support, special projects, and even CFO-level strategy and planning services. Outsourcing providers can quickly scale services up or down to match the needs of their clients.
Access to Expert Advice
Outsourcing accounting services provides businesses with access to experienced and knowledgeable professionals. Outsourced accounting providers often have a team of professionals who specialize in different areas of accounting and finance. This allows businesses to access expert advice and guidance on various financial matters, including tax planning, budgeting, financial forecasting, and more.
Improved Accuracy and Compliance
Outsourcing accounting services can improve accuracy and ensure compliance with financial regulations and reporting requirements. Outsourcing providers have a team of professionals who specialize in accounting and finance. They have a deep understanding of financial regulations and reporting requirements, ensuring that businesses remain compliant with applicable laws and regulations. Additionally, outsourcing providers use advanced accounting software and technology to minimize errors and improve accuracy.
Increased Focus on Core Business Functions
Outsourcing accounting services allows businesses to focus on their core functions and strategic initiatives. Managing an in-house accounting team can be time-consuming and resource-intensive. By outsourcing accounting services, businesses can free up time and resources that can be directed towards core business functions such as sales, marketing, and product development. This can result in increased efficiency and productivity, ultimately leading to improved profitability.
Learn More About Signature Analytics
Outsourcing accounting services can provide businesses with a cost-effective and flexible solution to managing their financial operations. With Signature Analytics, businesses can access a full-service accounting team that can provide expert advice, improved accuracy and compliance, and increased focus on core business functions.
Contact us today to learn more about our services and how we can help your business thrive.