Navigating finances is often one of the most challenging aspects of owning a business. As a business owner and expert in your field, financial concerns may be burdensome. Does time spent unweaving the complexities of a budget, billing, or financial planning detract from hours better allocated towards other necessities of company management?
As a struggling business owner, it may be time to consider outside help. For some owners, a virtual CFO is an ideal option. Read on to discover what a virtual CFO is, what tasks virtual CFOs often perform, and the benefits of utilizing virtual CFO services for your business.
What is a Virtual CFO?
As the name implies, a virtual CFO, or virtual chief financial officer, accomplishes the essential services of a CFO. Unlike a traditional CFO, a virtual chief financial officer performs financial tasks remotely, usually on a part-time schedule.
With the rise in startups and small businesses in the past decade, entrepreneurs have felt the need to utilize cost-effective professionals to achieve company growth on a tight budget – from marketers to accountants.
Outsourcing offers business owners the ability to utilize skilled, niche professionals at a fraction of the cost of a full-time employee. In some cases, even corporations may look to outsourced services for an inexpensive alternative to traditional staffing without compromising the quality of service.
As startups and businesses of all sizes look for cost-effective solutions to traditional, expensive CFO positions, virtual CFO services have grown in popularity.
What Does a Virtual CFO Do?
The services offered by a virtual CFO often depend on the hiring company’s unique financial requirements. However, most skilled virtual CFOs complete various broad and specific deliverables.
Broad Virtual CFO Services
- Virtual CFOs will guide your business towards the completion of predetermined goals by knowing where you are at any given time and how to communicate with your team and stakeholders.
- A great virtual CFO will become a member of your team. Ultimately, your chosen outsourced CFO will grow to know your company intimately, helping you consistently work toward business objectives.
- A virtual CFO will provide a competitive advantage for your business. Your CFO will help you identify opportunities for growth and cut wasteful spending. A financially prepared company will step ahead of the competition.
Specific Virtual CFO Services
Along with broad benefits, virtual CFOs often offer specific deliverables, including:
- Debt reduction
- Annual budgeting
- Annual strategy development
- Cost/ financial risk management
- Strategic financial planning
- Financial reporting
- Cash management
- Forecast creation
Occasionally, Virtual CFO Services Will Include:
- Light fundraising assistance, such as drafting a financial story
- Financial IT-system management
- Meeting assistance (participate in meetings, as requested)
- Light advisory assistance in mergers or acquisitions
What Are the Benefits of Virtual CFO Services?
There are many benefits associated with hiring a virtual CFO as a financial management solution. Below are the four most beneficial aspects of working with a virtual CFO.
As mentioned, outsourcing professional services is a cost-effective solution. This is perhaps one of the most significant benefits of virtual CFO services. According to PayScale, the median CFO salary is about $133,000, without accounting for bonuses, commission, or benefits. Most startups and small businesses cannot fathom affording a full-time CFO at this rate! However, financial management is absolutely essential to business growth and – often – survival.
Outsourcing CFO services is an ideal, cost-effective solution for small businesses looking to take control of their financial state.
Diverse Industry Experience
Many virtual CFOs work with a multitude of industries at any given time. While it is important to ensure your CFO has a plentiful understanding of your niche, financial insight stemming from diverse industry experiences is often uniquely rich. Your virtual CFO will be able to aptly respond to varied financial challenges, having likely dealt with a similar issue before.
Furthermore, a successful virtual CFO with plentiful industry experience will gain credibility over time. Selecting an outsourced CFO with positive client feedback points toward long-term success.
Some virtual CFOs work with a team or organization, providing you with multiple perspectives and expertise from a team of professionals. In the case that one CFO has not dealt with your unique financial issue before, a team of experienced financial experts will likely be able to provide a solution. Finally, if your personal CFO has to change during their tenure – though uncommon – the hand-off within an organization is often smooth and seamless. As other team members are apprised of your business, the learning curve will be minimal, and transmission will be painless.
A skilled virtual CFO will take time to comprehend the scope of financial services necessary for your business and will complete the tasks necessary to service your needs. Of course, as your business develops and changes, your CFO can adapt to better serve the company. Hiring a virtual CFO ensures you avoid incurring expenses for irrelevant or excessive services. You only pay for what is best for your business.
Does Your Business Need Virtual CFO Services?
While a virtual CFO is not the ideal solution for every business, it may be the best option for yours. How can you decide if a virtual CFO is the right solution for your company? Consider a virtual CFO if you fall into one of the following categories:
- You own a business that is experiencing rapid growth or increased complexity.
- Your business is struggling financially or unable to grow profitability, and you are unsure how to pinpoint the root of the problem and make knowledgeable changes.
- You need to make informed business decisions but lack the financial understanding to do so.
Remote Quality Bookkeeping: Expert Virtual CFO Services
Are you still unsure if a virtual CFO is the right solution for your company? We would love to help you make the best decision for your situation. At MyRQB, our virtual bookkeeping and accounting services involve a team of experts, working together on your account.
To learn more about how our team can relieve you of the financial burdens of business management, please feel free to reach out at 866.567.4258 or via our online contact form!