oldag00 said:
Does anyone here use a Texas-based fractional CFO/Controller service you would recommend? I'm hoping to hear about providers with experience in manufacturing industries.
How well does/did the relationship work for you? Did/do you feel you received good value for the cost? Was it a long-term solution? Or interim fill-in for a specific situation?
I would appreciate any information or advice you're willing to share.
Thanks in advance.
This is the industry I work in and have been in for the last 10 years.
We are based in Austin and I provide CFO/VP Finance services on an hourly basis. Our firm has a lot of CPG and tech/SAAS experience. We employee people across the country and have clients across the country. We compete with firms like Bridgepoint, E78, and Propeller.
Other firms will provide services on a set fee basis. My perception is that set fee arrangements provide a lower quality of services more like a bookkepper. We operate using teams - so multiple people per one engagement to match the level of work with the experience. Our team members may work 5-10 hours per week per client. This model works best for growing businesses or smaller businesses that need the experience of a controller/CFO but cannot support once full time. I do think we provide a good value for those clients, but I would hardly say we are inexpensive.
These numbers can vary widely, but I would say a $5 million/year revenue business could expect to pay 10-20k per month for a full-service team.
There is another model that is more like staffing - one person, 40 hours per week. I think this works better for interim roles. I see private equity bringing in a lot of these types people into their portfolio companies as well.
I have clients that have been with me for years. Oftentimes, our clients will outgrow our services. If we have team members putting 20+ hours per week on an engagement its time to start thinking about a FT employee due to economics.
I have good relationships with my clients, but it can be different from a full-time employee. Its much easier to move on from a consultant than a FT EE and I have actually passed clients along that weren't a good match for me.
I have found as a rule of thumb - you may take the market rate on an annual basis for an EE and that is close to what you may expect to pay on an hourly basis. For example, CFO market rate 250k/year translates to 250/hour. Controller rate at 165/hr, etc.
I see a lot of firms farming out their bookkeeping to India, the Philippines, etc. and I have a strong bias against this relationship. I have seen it tried many times and it often does not work out.
Hopefully this information is helpful.
