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 CFO or vCFO could be useful instead. What does a virtual CFO do for your small business? Here is everything you need to know to get started.
Role of a CFO
Within an organization, a CFO provides many important functions that can basically 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, which involves calculating risks and determining how and when to invest the company’s money.
- Controllership, or reporting 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 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. This is where a virtual CFO comes in, providing people with the same quality of services as what would normally be found in a larger company.
A vCFO 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
- 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
Regular, Ongoing Meetings
One of our virtual CFOs can even meet with you on a regular basis (either in person or via Skype) to discuss things such as 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.
Virtual CFOs provide small businesses with some 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 talent 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. Not only can this eliminate a great deal of stress, but it can also leave you free to develop other talents.
As you can see, a virtual CFO can benefit your company in a number of ways. Want to know more? If so, please contact us.