If you run a business, you’ve undoubtedly heard of a CFO – 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, 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.
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.
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
- Other non-salary compensation.
They also bring a wide variety of experience from different industries, providing ideas and strategies that could help you get a firmer financial footing or an edge on 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.
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.
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.
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 will help with:
- Business modeling
- Financial projections
- Cash flow management
- 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 top to bottom to find problems and inefficiencies.
CFO’s 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.
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 work, you can spend more time working on your business as opposed to working in it.