What to Expect from a Virtual CFO

Updated: December 15, 2022

If you are a business owner, you’ve undoubtedly heard of a CFO. Traditionally, the chief financial officer is the critical role in charge of everything that has to do with the financials of a business. This includes keeping track of financial performance, making strategic decisions, and financial planning for the entire organization.

However, for many organizations, having a full-time CFO doesn’t make sense. They can’t afford it, even though having additional financial expertise is critical to making informed business decisions.

But what about a virtual CFO?

This slightly-altered take on a traditional chief financial officer could be precisely what your business needs.

But what do they do, and how do you know if hiring one is the right choice for your organization? Read on as we explore this important position.

What is a Virtual CFO?

Let’s start with the basics – what a typical CFO position entails.

The CFO (chief financial officer) is the highest-ranking financial officer within a company, focused solely on the organization’s fiscal operations.

This differs from the more commonly known CEO (chief executive officer, to whom the CFO often reports) in that their job is to manage the cash flow, financial reports, payroll, taxation, and capital issues rather than direct the overall organization.

A good CFO also provides valuable guidance and advice to higher-level decision-makers, helping to keep them informed.

A virtual CFO offers many of these same benefits without the need to hire a full-time employee for the role. In other words, a virtual CFO can be seen as a part-time CFO that can make sure the key role is filled but without the extra pressure on your human resources.

Virtual CFOs are provided by organizations like Vertical CPA, allowing your business to harness the experience and knowledge of an entire team of financial professionals, even if your needs don’t require an actual in-house chief financial officer. This allows you to focus on operational improvements with the confidence that you have a trusted business partner taking care of your financial goals.

Benefits of Working With a Virtual CFO Compared to an In-House CFO

You may be wondering why you should go the virtual route as opposed to hiring a traditional CFO.

This is a perfect “sweet spot” for many smaller or mid-size businesses that have an eye toward growth and a desire to let others handle the financial details.

Virtual CFOs are less expensive than full-time hires for numerous reasons, including:

• The lack of bonuses
• Benefits
• Other non-salary compensation.

They also bring breadth of finance experience from different industries, providing ideas and strategies that could help you get a firmer financial footing or an edge over your competitors. For example, they can advise on tech tools like accounts receivable automation that help you get paid faster.

Still, they’ll come prepared to use all of the most common reporting and formatting practices of the industry.

This experience means they’ve also worked with and managed many different personalities, ensuring they’ll be able to fit in well with your team. It also provides them with a wide-ranging network that could benefit your business in numerous ways.

Addtionally, your virtual CFO may actually be a team of finance professionals. This way you get the advantages that come from their teamwork and combined experience.

Does Your Business Need a CFO?

You may be wondering whether it’s even worth investing in a CFO or whether you and your company would be better off continuing to do things the same way. This is one of the main question you have to ask yourself as a business owner. Because in of itself, having someone taking care of the financial leadership of your business will change your entire dynamic.

For starters, hiring a CFO (even a virtual one) will be an extra cost. Still, there are numerous signs you need to take the plunge in order to optimize your business or continue to grow. Many organizations may find they’re not easily able to access the information and reports they need with their current bookkeeping or financial system. This can slow decision-making on crucial issues or even prevent you from understanding your full financial picture.

You may also find yourself running out of cash at unfortunate times – like when a crucial invoice is due or payday is upon you. A CFO will help with more mechanical issues like these but also provide so much more.

They can function as a valuable source of advice and guidance on the direction of your business and even set up a short- or long-term financial plan.

Perhaps most importantly, a CFO can help you spend more time working on the parts of your business that inspired you to start it. Taking financial and operational tasks off your plate frees up valuable mental space for growth, expansion, and improved efficiency – all crucial aspects of any business.

Having a dedicated strategic partner covering the financial end of your business will free up your bandwidth so that you can make an even larger impact on your organization.

What Services Do Virtual CFOs Offer?

When it comes to financial services, it might be shorter to list what virtual CFOs don’t do!

These experienced, multi-talented professionals have the technical skills to help with:

• Business modeling
• Financial projections
• Cash flow management
• FInancial Reports
• Investor relations
• Implementing more efficient accounting systems
• And more.

They’ll be able to help develop key performance indicators and other metrics of your organization’s financial health and even audit your business from top to bottom to find problems and inefficiencies.

CFOs can even manage your accounts payable and receivable, taking the hassle of invoicing and bill paying out of your hands. While they may not be in your office, they’ll be with you every step of the way, providing valuable services and guidance just like a regular CFO.

This is another benefit of working with a virtual CFO. Since they work as part of a larger team, they’ll be able to provide you with complementary accounting services. So even if you are only looking for a CFO, you may actually end up with the support of an entire accounting department.

Interested in Virtual CFO Services?

A virtual CFO may be exactly what your business has been waiting for. They provide all of the myriad benefits of a traditional CFO without the high expenses of hiring an experienced, full-time employee.

By freeing you up from the financial workload, you can spend more time working on your business as opposed to working in it. Also, unless you have a robust financial background, they will provide you with valuable expertise that could be missing from your business.

If you’re looking to hire a virtual CFO, Vertical CPA can help. Contact us today to learn about how our virtual CFO services can help change your business for the better!