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Small businesses need the right financial advice to continue growing, yet are often at a disadvantage because many cannot afford a full-time Chief Financial Officer (CFO). If your business is one of them, perhaps a virtual, partial CFO or vCFO could be useful instead. What can we, as a virtual CFO, do for your small business? Here is everything you need to know to get started.
What is the role of a fractional CFO?
Within an organization, a CFO performs many important functions that can be broken down into three different categories:
- Economic strategy/forecasting – This involves identifying which areas of a company are performing the best in order to better capitalize on them. It also includes making predictions in an effort to guide a company in a certain direction.
- Treasury responsibilities – This involves calculating risks and determining how and when to invest the company’s money.
- Controllership – This duty is to report accurate and timely financial information to shareholders, creditors, and others who have a “need to know.”
All of these roles are equally important, yet many small business owners in Tucson overlook them because they feel they only apply to larger companies. Others may not tackle them because they lack the technical expertise to do so. No company is too small to make smart decisions, and a lack of know-how isn’t an excuse to forget about these important tasks. A virtual CFO or partial CFO helps you by providing people with the same quality of services as what would normally be found in a larger company.
What a Virtual CFO does:
A vCFO or fractional CFO may perform several duties within the above three roles, a few of which may include:
- Streamlining accounting functions
- Implementing new reporting procedures
- Developing a cash flow forecasting model and cash flow management
- Ensuring the proper keeping of payroll records and compliance with local, state, and federal tax requirements
- Creating a budget
- Developing a financial strategic plan for expansion, including a three or five-year financial model
Facilitating ongoing, regular meetings:
We think communication is one of the most important parts of this kind of relationship. Because of this, one of our virtual CFOs can meet with you on a regular basis (via zoom or Google Hangout) to discuss your systems, cash flow, or forecasts. We take into account what works best when determining a schedule. Many small businesses find that 15-30 minutes each week along with quarterly meetings of about an hour or so work perfectly. Of course, we are always available in between meetings to discuss your needs or answer any questions you may have.
How can you benefit from this relationship?
Virtual CFOs provide small businesses with amazing benefits. The biggest one is that you can enjoy the benefits of a full-time CFO without all the expense. Our packages are customizable to fit your needs, so you will only pay for the services you need. Finding someone to fill this role in your local area will not be a problem, since a vCFO can work from anywhere. Other benefits you may enjoy are:
- More time to work on other aspects of your business such as marketing and sales
- A better understanding of your company’s financial health
- Greater control over your money
- Enhanced decision-making capabilities due to an ability to see the bigger picture
- Access to professional advice for those especially tough business decisions
- Stronger financial controls that will reduce insider threats
- More accurate and timely financial reports
Small business owners wear many hats, and must often learn new roles as they go. For many, learning the financial aspects of a business is one of the most challenging roles to learn, yet is also the most important. When you hire a virtual CFO, you have one less role within your company to master and more time to focus on your employees and clients. Not only can a vCFO eliminate a great deal of stress, but it can also leave you free to develop other talents.
Are you a Tucson business owner who would benefit from a virtual CFO? Please contact us for more information!
This is a recently revised version of a previous post.