How a Virtual CFO Can Guide Your Growth

Updated: December 28, 2022

As a business owner, you are the one that is in charge of making the decisions that will move your company forward. And at the core of each of your decision is your objective to make your business grow and become sustainable in the long term.

But as you know, growing your business is not only about making sure it’s operating efficiently but also requires a strong understanding of your financial reporting. Initially, it is very common for business owners to be the ones that manage their finances. But as your organization grows, handling every financial task can be excessively time-consuming. So once you reach a certain point, you need to recognize that you will need the financial expertise of a Chief Financial Officer.

If you are constantly asking yourself questions like:

• Do we have enough room in the budget to hire employees?
• What is our burn rate?
• How is our cash flow? Do we have enough to cover expenses this month?
• Are we growing at the right pace or are we falling behind?

This is when the expertise of a virtual CFO will come in handy.

What Does a Virtual CFO Do?

Virtual CFOs serve as an extension of your team. In essence, they take care of your entire financial system without having to onboard an entire team of financial professionals.

More specifically, virtual CFOs offer:

• Complete bookkeeping services
• Business modeling and financial projections for your business
• Cash flow management and planning
• KPI selection and tracking based on your business’s unique goals and needs
• Business performance audits
• Board reporting, audit assistance, and CRA support
• Accounts receivable management which includes invoicing your clients
• Accounts payable management which includes paying your bills

Ultimately, the goal of a virtual CFO is to manage the financial side of your business just like a full-time chief financial officer would. But in a way that fits the financial requirements of smaller businesses. With the financial advice of an entire team of experts, you can spend more time focused on your team, customers, and moving your business forward.

How Can a Virtual CFO Guide My Business Growth?

The best way to think of a virtual CFO is as if it were a full-time CFO that is part of your company. Because from a functional perspective, they will carry out the same role.

At Vertical CPA, our virtual CFO services are built intentionally to guide your business toward growth. We start by helping you improve business performance, provide guidance for operational decisions, and emphasize strategic decision-making to get your business where you want it to go.

Said differently, a virtual CFO can help you see how your operational decisions translate to your balance sheet.  This way you can get a much better alignment between your day-to-day operation and your financial goals.

Improve Business Performance

This is where the groundwork for growth is built. To grow your business, you have to have a strong financial foundation and that starts with understanding where your business stands, creating a plan and taking action to improve performance.

First, a virtual CFO will help you build a business model that looks toward the future. It will rely on industry-specific operational metrics so your model is tailored for your specific business.

This also means if a makeover of your processes is needed, you’ll have the financial planning in place to make it happen. It’s essential to have processes that can grow with you and adapt to your business as its finances continue to develop.

Virtual CFOs know how to derive forecasts and reports that provide information to further your business. Take the statement of cash flows as an example. Cash flow planning and cash flow forecasting are of the utmost importance. Since positive cash flow is necessary to keep your operation moving forward. It shows there’s more money coming in than going out, which is essential for a growing business.

When you rely on the experience of a virtual CFO, you can have confidence your business performance is trending in the right direction and that all your financial decisions are based on reliable data.

Guidance for Operational Decisions

Operational decisions are what keep your business going. A virtual CFO will partner with your CEO to provide data-backed advice for day-to-day decision-making and creating the best business plan for your needs.

Considering finances play a role in every area of your business, a virtual CFO can offer quantitative support in:

• Human resources: Do we have the funds to make a new hire?
• Marketing and sales: Can we boost our marketing budget? What are the sales channels producing the best results?
• Applying for a bank loan: is a bank loan the best option? How can we get the most out of a bank loan?
• Pitching to investors: What numbers do they want to see? What areas can we improve to attract more investors?
• And more

Strategic Decision-Making

Not to be confused with guidance for operational decisions, virtual CFO services also include strategic decision-making. This is more of a focus on long-term strategizing than short-term advice.

Strategic decision-making is about putting your business in the best position for success in the future and minimizing any financial risks you may encounter along the way.

As a growing business, you’ll likely have:

• New products launching
• Product pricing questions
• The potential to expand departments or offer new services
• Potential to acquire a competitor
• Coming up with an exit strategy for your business
• Working on finding investors and managing their equity in your business
• Developing financial forecasts to to your end of year planning

In these situations, a virtual CFO will work with you to determine long-term effects and strategies so you can be prepared for what’s ahead.

Ready to Take Advantage of Our CFO Services?

Virtual CFOs have plenty to offer growing businesses, including tactics and strategies to build upon their growth. They can provide you with the financial strategy that your business needs without the upfront human resource investment.

Through a variety of services, improved business performance, guidance for operational decisions, and strategic decision-making, virtual CFOs take financial management off your to-do list. There’s no longer a need for you to spend valuable time sorting through numbers, generating reports, and hoping you’re making the right moves for your business. You can have the certainty that you have all the financial services your company needs to achieve its goals.

At Vertical CPA, our virtual CFO services are built to help your business grow. Book a free call with us today to learn more about what our services can do for you!