Virtual CFO Services: What are they and how can they help your business?

Business AdvisoryVirtual CFO

16 March 2022

There has never been a better time to create the next multimillion-dollar business. But a great idea requires starting your business off on the right foot if you want to build a great business. Strategic consulting when your business begins operations is vital, but few businesses are in a position to hire an in-house CFO when they’re starting out.

If you’re in this position, you may need to outsource your financial matters to an individual with expertise in your industry who has specific experience working with startups. This is where Virtual CFO services come in. A Virtual CFO can help you with strategic financial expertise – everything from mergers and acquisition to raising funds and business planning.

Outsourcing these services allows you to focus on your main business and cut costs without taking on the overheads of a full-time CFO.

What is a Virtual CFO?

A Virtual CFO means a Virtual Chief Financial Officer. The role of a Virtual CFO is to provide high-level third-party financial services to your business remotely. A Virtual CFO offers the same benefits as a full-time CFO who work in larger organisations, including:

  • Risk management.

  • Financial planning.

  • Financial reporting.

  • Creating financial forecasts.

  • Identifying emerging market trends.

  • Aligning business and financial strategies.

Virtual CFO services can benefit most small businesses because they are a risk-free investment and an intelligent asset for your business.

What services does a virtual CFO provide?

When a business starts, a CEO or the business owner can wear both hats. But as the business grows, so does the complexity of its financial operations. Before long, the limited financial knowledge you have is no longer enough – which is where Virtual CFO services can step in to assist corporate startups. Here is what they can do:

  • Help with cost-efficiency.

  • Supply chain review and advice.

  • Assessment of staff and productivity.

  • Allow team to focus on their core tasks.

  • Help to raise external capital.

  • Financial planning, including cash flow management and forecasting.

  • Preparation of financial statements and reports.

  • Business growth strategy.

  • Strategic goal setting.

How does it work?

A Virtual CFO is a part-time CFO who works remotely hence the name "virtual." Hiring a Virtual CFO provides your business with high-level experience like an in-house CFO. The advantage of hiring a CFO who works remotely is that you get the same services and expertise at a much lower price point. On top of this, you can get a CFO who suits your business' needs with expertise in your niche or industry.

What businesses should hire a virtual CFO?

When your business expands, determine whether you need an accountant or Virtual CFO services. You can ask yourself the following questions to understand whether it's time to employ a Virtual CFO:

  • Am I about to raise capital and need to show that I have an experienced finance team assisting with my strategic and operational requirements?

  • Do I need help raising external capital for the first time?

  • Am I experiencing cost inefficiency due to retaining multiple finance personnel and office space for them?

  • Do I require independent and quality business advice to grow the business?

  • Am I getting timely financial information to make informed financial and strategic decisions?

  • Do I understand my business’ requirements for cashflow and working capital?

Before hiring a Virtual CFO, carry out thorough research. Ask for references from other startups and find out if they have a Virtual CFO they can propose.

How much does a virtual CFO cost?

Most corporate finance experts will provide a personalised quote depending on your business's needs. The pricing is normally inclusive of services such as:

  • Business-wide Key Performance Indicators (KPI's).

  • Budgeting and Forecasting.

  • Weekly management meetings.

  • Bank relationships.

  • Business tax return.

  • Resource planning.

  • Revenue recognition.

  • Accounting and business advisory.

What are the benefits of a virtual CFO?

Whether you have a small or large business, Virtual CFO services can help your business to maximise its profits and execute its business strategy. Let's see some of the benefits of why your business needs a Virtual CFO.

Understand the available market opportunities

Do you want to run a successful business? Exploring the available market opportunities is vital. A Virtual CFO will help you take advantage of the profitable opportunities in your industry because they understand the competitive market.

Boosts the cash flow and profit margins

A Virtual CFO can help you with profit and cost management through streamlining back-office tasks and assist you in having unmatchable financial control. When you have all the information about your business' expenditure at your disposal, you will clearly understand how your business operates. As a result, you can plan adequately to increase profits.

You will work with a team of experts

When you work with a Virtual CFO, you're not working with an individual but a team of financial experts. Your business will enjoy professional financial services. In addition, you can take charge of multiple financial needs simultaneously.

Provide financial expertise and intelligence

Your primary focus is how to help your business grow. The primary focus of Virtual CFO services is to help ensure other business areas such as achieving the desired profit, performance, revenue, and pricing run smoothly. Hiring a Virtual CFO helps you understand how numbers work so that you can grow, repair, and develop a successful business.

Conclusion

If your startup could benefit from Virtual CFO services to get it set up for success, the Findex team boasts years of experience and have successfully helped many businesses reach their growth plans.

Our all-inclusive services include business advisory, corporate finance, tax consultant, and general insurance, allowing us to offer you expert consultation across your business.

Contact us today and get to know how a Virtual CFO can help with your business strategies.

Author: Nigel Smellie

Nigel started with Findex in 2001. Nigel obtained full membership to the New Zealand Institute of Chartered Accountants in 2007. As a Partner, Nigel offers business advisory to his client base. Nigel is particularly passionate about digital solutions and ensuring clients are able to obtain the information they require to make accurate and timely decisions. Nigel works across two offices Alexandra and Cromwell.