Why Virtual CFO Services are Good for Small Business

Although on-demand virtual CFO services may seem to be a cosmetically modern alternative to face-to-face interactions with CFO’s, the recent destruction of local financial opportunities has exploded in this industry. The COVID-19 pandemic that began in early January resulted in tens of thousands of small business closures, many of which were unable to recover with many issues affecting their bottom line.

A virtual CFO can act as an ally for startups and small businesses during perilous times, especially when the government has been preoccupied with preventative measures such as ensuring the recent COVID-19 pandemic doesn’t sweep across the country.

As a startup or small business owner, you want to be trusted by partners, investors, and future clients – that trust is definitely earned! You want to let them know you are reliable and can deliver against your promises, which means freeing up time in your schedule to do just that!

A virtual CFO can provide a lot of guidance on best practices which would be invaluable to making sure you don’t get yourself in hot water with partnerships or clients down the road if you’re not careful.

What is a Virtual CFO?

As the name justifies itself, a virtual CFO is someone who helps you with your finances virtually. This could be someone who helps you with your taxes, teach you how to handle your finances and manage your accounting as a chief finance officer. The CFO is responsible for most of the financial aspects of your company.

Startups or a business that has just started a year back might find it hideous to hire a full-time CFO. On the other hand, finding a qualified CFO who wants to work for you remotely might save you money.

Having a full-time virtual finance office, you are good to go as a virtual CFO cannot add much value to your company. However, there are both benefits and disadvantages to hiring a full-time CFO. If you are a small business or just started, it’d be a better idea to hire a Virtual CFO as they will not put weight in your pocket.

You may have already assumed the answer for what is CFO or virtual CFO means. Virtual or not, they both work for your company’s finance and accounting.

Areas That a Virtual CFO Should Cover

With the limited financial support and being a startup, businesses may feel pressure to cut staff and rely more on freelancing professional services. Rather than following expensive in-house full-time CFO solutions, they prefer virtual CFO services.

It’s a pretty safe assumption that you need some help with managing your finances. A general rule is to make sure the finance officer understands specifically how your accounting systems are set up and whether or not they will potentially conflict in some way with their preferred method of accounting for money transactions.

  • Any reliable CFO professional would always look for growth in your business. Setting up the long-term growth plan should be a part of the CFO’s strategy.
  • A good CFO would understand your business and apply his experience of managing bookkeepers and account departments to produce data for the growth of the organization
  • They will plan your finances and budgeting by forecasting your business cash flow.
  • A good CFO would add more value by identifying good opportunities rather than just filling a CFO role in your company.
  • They will help your organization by preparing financial statements and will perform financial risk management.
  • CFOs are not limited to managing financial activities. They will also do cost management by doing supply chain reviews and planning.
  • They should also help your business in debt reduction.
  • Valuation and finding your company’s worth for funding
  • They will help your organization in transforming it to favor smooth growth and workflow.

However, it’ll all depend upon service area, business size, industry, financial requirements, and the type of business.

Advantages Of Virtual CFO Solutions

virtual cfo services advantages

A virtual financial officer will act as the liaison between you and your accountant. This is very beneficial to help keep all of your books in line.

They must take advantage of external help to handle any unresolved financial and operational challenges. Freelancer CFO services are especially capable of helping with these issues.

So what makes a virtual CFO more efficient than a traditional one?

  • No office space is required for someone providing CFO services for startups and businesses. Top of that, if their specific area is to help small businesses and startups, it must be cheaper than in-house CFO solutions.
  • No need to hire an accountant as they’ll have their professional team for accounting requirements. You’ll save even more rent from office space and electricity.
  • More working hours and some of the VCFO services provide 24×7 support.
  • Freedom to work with your CFO from anywhere in the world
  • You have the freedom to choose a CFO as per your requirements and experience, 
  • You’ll get a more professional approach from any CFO consulting company that offers CFO services for small business
  • A virtual CFO works as a part of your team and can easily fit into your workflow.
  • A CFO will perform for all your business financial segments, they will assure you results in finance and reduce any financial loss which usually happens within the organization as a fraud.
  • VCFO services provider prepares more accurate financial data as they may have been working for many other companies and having a professional team for that purpose.

Good CFO Will Map his Advice for the Growth of Your Business

After a disaster, businesses must use some assistance before and after they reopen. Businesses need help dealing with lingering financial and operation concerns so that they can focus on getting the business off the ground as quickly as possible.

When a company is suffering from financial problems, it cannot be neglected that fact there is a role that must be fulfilled by someone who can act as the Chief Financial Officer (CFO) even on a part-time or temporary basis.

Another viable alternative for any company in this situation is to hire the services of an external CFO (VCFO) who can help alleviate some of the burdens of dealing with finances.

Since last year, With the massive impact of the COVID crisis. Many businesses have been running into a difficult challenge; deciding whether or not to stay open.

Any good CFO consulting company will look through your business growth prospectus and prepare an impactful plan. As they are serving their services virtually, you’ll have many tax, accuracy, and financial benefits.

A professional CFO consulting company is a must-have if you’re aiming to get your most important work done completely accurately and on time. Why? Working with an in-house CFO professional may not give you the flexibility or unique skills you require that can come from hiring a virtual finance department for guidance and help.

Help You to Build a Solid Business Plan

virtual cfo services business plan graphics

If you’re a small business owner and are considering buying infrastructure to help run your business, then there is only one thing you need to do before any research can take place: hire a virtual CFO.

A virtual CFO will be able to provide insightful resources and options, so making decisions about what kind of equipment your organization needs to buy becomes that much easier!

They will help you in most of your business plan, including recruiting, management, cost, finance planning, and setting a goal that represents the company’s growth.

Finance Planning

Financial planning is a projection of data which is an important part of any business planning. Finance planning is what your business will walk on to succeed. It’ll design a road map for your business so you will be able to make better decisions.

The financial planning of a business is not as easy as a cake; it’s something that requires serious attention to detail. However, it is helpful, and worth trying out by following some tutorials on the internet.

However, for good financial planning, you need more than just some serious approach to what services and products you want to implement into your business plan.

Good data, imagination, and research go along with the process – all 3 of these things are important before compiling any kind of business plan.

Do yourself a favor and don’t try to tackle something like this alone. It’s wise to hire several professionals who specialize in each area for maximum results, no matter which direction your company might take or how well it does when first launched.

A well-prepared financial plan will help your business make more profit and value. It’ll also keep you well-versed and prepared when a crisis like Covid hits the economy. You will feel ready to represent your business to the investors.

The CFO consulting company or VCFO services will perform all these challenging tasks for your business by preparing a projection of your business.

Sees Long Term Growth

A virtual CFO services company or an individual CFO professional will manage the business activities and shorten the gap between the company’s finances, strategies planning, most of the operational tasks to achieve the long-term business goal, and most other things.

For a business to be successful, it needs someone on its side who understands all of the ins and outs of accounting and how it relates to finance, as well as the risk management aspect of running an enterprise. These two areas are so important that they might even take priority over all others.

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