Benefits of engaging Virtual CFO for SMEs and Start-ups
When a business is growing, the entrepreneur has three major challenges – First, he needs a qualified Chartered Accountant with some experience to guide and supervise his finance team. Second, he needs MIS which is combination of monthly profit and loss account & balance sheet with ratios to understand how his business is progressing. He wants a good cash flow every month to see from where the cash is coming & and cash is going. Third, he needs a senior finance person who can come at least once a month for business review and discussing MIS. It is not possible for SME to afford all of the three people cost and thus virtual CFO helps in managing needs of the owner at one go in packaged form.
As a small or medium sized organization, you may not have the resources available to hire a senior finance resource, despite needing access to that level of expertise.
For any company, solid financial management practices are necessary to ensure profitability. As a business owner, where should you focus your efforts- on client deliverables, or on managing your revenue well? Outsourcing CFO services could be a solution to that issue.
A Virtual CFO can provide the level of expertise you need as a part-time contracted resource. Virtual CFOs will work with you to manage and build your business by ensuring that your financial resources are well managed and available when you need them.
Benefits of engaging a virtual CFO service:
Avoid the full-time overhead- The Company will be benefited from the lower costs of a virtual CFO as opposed to hiring a full-time, in-house Chief Financial Officer. This is due to the flexible arrangements associated with virtual CFOs that allow them to scale their services up and down depending on client needs. As a result, their services are made available at a cost-efficient price.
Only pay for what you need- Hiring a virtual CFO gives you the option of customising the services offered to suit your business’ unique needs. Employing a full-time CFO may be expensive and even a bit redundant when your business doesn’t require all the services of a full-time CFO. With a virtual CFO, you are able to outsource specific tasks that your business requires and pay only for what you need.
More accuracy in financial reports- While many reports can be prepared internally, getting help from a virtual CFO eliminates the risk of errors in financial reports that will give you inexact information on your finances.
Strategic financial planning- A virtual CFO, with his or her knowledge and expertise, can use their analytical skills to inform your business planning. Based on their findings, they can help you to implement a strategy and provide sound advice that will ensure your company is prepared for the future.
Better Decision support system- The financial standing of your company may not be where you want it to be. With the help and advice of a virtual CFO, you can make better financial decisions that improve your situation.
A sounding board for your business- Sometimes when you are caught up in the day-to-day of running your business it can be hard to step back and look at things objectively. A virtual CFO can act as an important sounding board for all significant business decisions that may impact your financial situation.
Increased cash flow- Ultimately, the goal of any business is an increase in cash flow. This is the primary function that businesses engage with virtual CFOs for. By making use of a virtual CFO service, you will gain awareness of the areas of your business that needs improvement and be able to implement the recommended solutions.
Improved oversight- A Virtual CFO, who is not distracted by day-to-day accounting assignments, has more time to focus on strategic and high-level financial services.
Education and Upskilling- Over time, the CFO’s goal is to educate and upskill the business owner on financial based outcomes. The business owner receives first-hand experience of the functions and strategic advice used when achieving financial related goals.
Systems and Processes for Growth- Your Virtual CFO should go beyond the financials to review your accounting systems and operational processes, ensuring your business is operating as efficiently and effectively as possible. They will confirm the marketplace branding is consistent with your operations and explore opportunities to streamline your business with system improvements and modifications.
There’s a Smaller Learning Curve- You’re probably aware of the general expectation that new employees will typically take 6-12 months to get up to speed and perform at their maximum capacity. With a virtual CFO, they have so much experience entering organizations mid-process that they always hit the floor running. Virtual CFOs can very quickly assess the current situation and begin putting actions in place to resolve challenges and achieve goals.
Small medium business groups especially feel crippled by the lack of capability to afford a full-time CFO and the ability for strategic, financial and operational decision making can benefit by employing a virtual CFO service. With Virtual CFOs, a company ensures continuity, and decreases dependence on one person. In some cases, the cost of a Virtual CFO can be as cheap as 50-70 per cent the cost of a full-time CFO.
Can a virtual CFO help you overcome your business challenges and partner with you to help you achieve your organization’s potential?
