In today’s business environment, the role of the CFO cannot be emphasized enough. This is because CFOs are critical for businesses to grow and flourish continuously.
However, many small and medium-sized businesses do not have the financial power to hire a chief financial officer CFO on a full-time basis. Most of the companies have accountants and bookkeepers that make sure the books are okay but don’t have the skill required to relate the numbers, strategy, and operations.
Who is a virtual CFO?
In a nutshell, a virtual CFO is someone who works on a part-time consulting basis as the CFO of a company. The CFO is primarily the financial overseer, business advisor and compliance consultant of the company. As such, the CFO is responsible for all matters finance and without the proper guidance, the business will fail.
What doesn’t the CFO do?
Even though the CFO is said to be in charge of all things finance, they are not involved in the day-to-day accounting operations of the business. This is the role of the accountant or bookkeeper. However, the CFO works in close conjunction with the accounting staff.
Why should a small business hire a Virtual CFO?
For every small business or startup, cash flow is a prevalent issue. While it is critical that a business doesn’t skimp on critical services that help it grow, it’s also important to keep staffing costs in check. In as much as the business is looking to get the best value for money, payroll expenses can blow up the budget and cause problems throughout the organization. With a VCFO, you can get the expertise and knowledge you need without the significant commitment of a full-time CFO.
Expert in business strategy
Strategy is an important aspect of business. As previously stated, the role of the CFO goes beyond that of the accountant. The CFO is instrumental when it comes to laying out a strategy for the business in matters such as budgeting, fund-raising, cash-flow management, financial reporting, design and implement systems and controls, risk mitigation among others.
With a Virtual CFO, a business can identify gaps in the market and take advantage. Without this expert advice, not many small businesses can grow at an exponential growth, let alone survive the first few years.
Financial analysis and synthesis
As accountants like to say, the numbers tell the story. If you don’t know your numbers, you don’t know your business. The CFO’s financial analysis and synthesis is key to business growth. With proper financial analysis, the decision-makers in the business have a much easier time planning for the future. The financial results are essential in making operational and strategic decisions.
What are the objectives of a virtual CFO?
The objective of a virtual CFO is to:
- Provide critical assessment and review the business performance.
- Provide the decision makers with a detailed analysis of proposed changes before they are made.
- Implement best practices and discipline in matters revolving budgeting, strategic planning, and target setting.
- Help the decision makers make better, more informed decisions
Services of a VCFO can be invaluable to a small or medium-sized company. With the wealth of expertise and experience a CFO brings to the table, businesses can better handle challenges and grow at better rates. With many VCFOs offering pay-as-you-go services or fixed price agreements, small businesses benefit from the expertise while keeping the expenses in check.