Virtual CFO – Everything needs to know about

A virtual CFO assists a company by analyzing and managing the organization’s financial status. You can get the services of a highly skilled virtual CFO at a minimum cost to improve your business or organization profit.

First, we need to know who is CFO. CFO stands for the Chief Financial Officer. It is responsible for managing the financial actions of a company.

It includes financial planning and analyzing the financial strength and weakness of the business and finding a better solution for it by taking corrective actions.

WHAT’S IN IT

What is a Virtual CFO?

A virtual CFO has the expertise to manage your company regarding finance and also helps the staff in strategic planning and decisions. CFO also helps to analyze the company’s growth and profit and gives expert advice to increase the profit.

It’s a new concept that helps small businesses at a reasonable price. A virtual CFO usually handles the job of house-in CFO.

He/she monitors the financial health and gives guidance according to the issues of the company. The house-in CFOs are sometimes out of budget for small business and start-ups, so for them, I truly recommend virtual CFO services.

In comparison to the house-in CFO, virtual CFO is less expensive as they are not the employee of the company. A house-in CFO is part of the company that gets benefits, bonuses, and salary, but a virtual CFO cost is based on the deliverables.

What are the services a virtual CFO provides?

A virtual CFO provides better services than a traditional house-in full-time CFO. As it is more beneficial for start-ups, small business because who have low budget. Some of its services are:-

• A CFO can manage the accounts and analyze the company’s data and interpret the results for the benefit. He/ She always try to reach the company’s goals and objectives.
• Suppose you are financially frustrated and want to increase your productivity in the market. A CFO can help with the proper guidance and his/her network with different invertors and clients.
• A CFO participates in your board meetings and coaches your staff for the betterment of the company.
• A virtual CFO provides a detailed report of your finance and guides you accordingly.

Roles of Virtual CFO

The 3 essential roles of virtual CFO are:-

Bookkeeping:

It refers to keeping records of bills and invoices sent to customers as an entry in financial transactions. If you do this yourself, then you will not be able to do other important business tasks. A virtual CFO has to take responsibility for finance and analyze the information from the accounting data. This frees up your time and can focus more on your business goals.

Accountant:

An accountant uses the data created by the bookkeeper along with other records to generate the financial status of the company periodically. It includes balance sheets and income statements. By this statement, business owners determine their progress and make decisions. As the owner, you are not able to make these sheets yourself, so you have to keep a person who analyzes the transactions and provides you with the monthly financial status.

Main CFO:

CFO manages the finance staff and also reviews the transactions and statements. Apart from this, CFO creates a budget by analyzing the data and advises the owner for future investments by being a part of major financial decisions. 

Do you need a virtual CFO?

Yes, my answer is yes because any businessman or entrepreneur don’t like accounting and finance or in other words, you don’t want to waste time on it as you have many important tasks to do related to your business like making plans and strategies for the business growth.

So there is a need for a person who handles your transaction, bills and creates monthly statements and puts the results in your hand so you can take decisions according to it.

The person is CFO (Chief Financial Officer), He/she is the one who manages the finance related staff. But not all business owners afford full-time CFO. So here is the solution for the small business or start-ups that you can get services from the virtual CFO.

The job of VCFO is the same as the house-in CFO but it is reasonable. The benefit of having a CFO that you get more time to focus on your goals and objectives and the CFO helps you to take finance decisions by analyzing your data and by advising different investment ideas to increase your productivity and reach in the market.

Virtual CFO vs. House-in CFO

So if you want to manage your finance, I recommend you to get the services of a virtual CFO as there are many benefits of a virtual CFO. Some of them are:

Flexibility:

Virtual CFOs are way more experienced and can handle complicated challenges more easily. But in the case of house-in CFO, they cannot handle complicated challenges due to lack of experience and restrictions 

Improving productivity in less time:

Suppose you hired a house-in CFO, then first, he needs at least 5 to 6 months to understands the progress of the company.

He/she will take time to adapt to the environment of the company. But services of a virtual CFO will provide the best solution in a reasonable time as he/she worked with other companies and have great experience in the field of accounts and finance.

Strong business network:

A virtual CFO is a good decision-maker. They help to make the best decisions for the company regarding investing as their network is strong.

Professional team effort: A VCFO has a professional team who give lots of solution for a single problem.

Services at a reasonable cost:

The services you will get from the virtual CFO are at a minimum cost that a small business owner can afford it. But in the case of house-in CFO, it costs a lot that only bigger organizations can afford it.

Follow standards:

Virtual CFO expertise has good exposure in the field of finance and accounts. They follow the standard rules for creating the finance report. They create a proper report format, which is helpful to understand easily.

Advantages for business

Some of the advantages of virtual CFO are:

Provide better guidance:

A CFO is responsible for managing financial transactions and focuses on your business growth. He/ She will help you to understand the key performance numbers, pricing, setting, achieving profit goals. They build and grow your business and make it successful.

Better operational control:

This is the dream of every business owner or start-up person to reach their business at the top level. But sometimes they ignore small details that need improvement so a CFO can acknowledge you about the different areas of your business from time to time by which you can plan accordingly.

High-level services:

The virtual CFO provides high-level financial services at a very low cost in comparison to an in-house CFO. The services include a focus on strategy, uncover various leaks, tax deductions, and restructuring of the business that helps in reducing the overall tax of the business.

Only pay for what you need:

This means you only pay for those services which you need. This is one of the benefits of hiring a virtual CFO. You can customize your services according to time and specific tasks.

Provide proper guidance:

A virtual CFO helps to educate with the proper skill of managing the business to business owners. A CFO gives proper guidance and advice to the owner in financial-related goals.

Virtual CFO jobs

There is a huge requirement for a virtual CFO in the market, so it can be a good opportunity.

The accounting profession has gone through some major changes. Many small businesses and start-ups cannot afford a full-time CFO.

A virtual CFO is quite affordable for them and a good opportunity for you to being an expert in this field as you can work with different organizations that give you a lot of experience. But first, you need to grow up your other skills too. Some of them are:

1. Problem-solving abilities
2. Leadership skills
3. Teamwork
4. Cash management and finance accounting

Apart from these skills, you should have a finance-related University degree and professional qualification in accounting.

Finding the right person

Hiring people to your organization is one of the tough tasks. The decision should not be taken lightly. Finding the best employees for your organization is part of your business growth, whether they are front runners or your senior staff.

Financial management is an important part of your business, whether your business is small or big. Every businessman needs to take care of their budget and make decisions according to it.

But owners don’t have much time to manage the books or the software, and some of them don’t have any knowledge about debit, credit, bookkeeping, accountancy.

So there is a need for an expert who takes care of all these data and creates a final report through which the owner can estimate or make decisions for the future.

Now the question is how to find them or what we call them?

You need to find a person who supervises your finance staff, financial reports, budgeting, resolve your finance-related issues, advises you according to the report, profit-loss, direct you for better investments, and helps you to raise your capital.

These can be done by a CFO. Your staff will work under a CFO. A CFO oversees your transactions, analyzes the final reports, and gives you advice related to finance. He/she takes part in your major decisions and coaches you where to invest your money.

Although it costs a lot that only bigger organizations can afford a CFO. So what will small organizations do? The answer is simple; they can hire a virtual CFO. To find the best one:

• A CFO should have good knowledge of accounting, finance and should have a great passion for his/her work, which brings the company’s success.
• A CFO should have a good leadership quality so that he/she can lead his/her staff and bind them in an objective to look forward to success.
• Good communication is always needed in every field. A CFO should have good communication skills with co-workers.
• A CFO should have problem-solving skills. He/ She should be prepared with common solutions.

Conclusion

According to you, what’s better, a house-in CFO or a Virtual CFO?  I will prefer a virtual CFO with customized services at a reasonable cost. They are experienced, standardized, and great advisers that help me to grow my business at a reasonable time.

They are said to be the right hand of the business owner as they take part in major financial decisions and advise better investment strategies. Hiring a CFO frees up you to focus on other important objectives and goals of your business. A CFO minimizes your burden and helps you increase your business productivity.

Also Read: Amazing Things You Should Know About Leadership Excellence

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