Every small business owner needs the support that a CFO can provide. Business owners need assistance with how to best structure their company, planning taxes, planning for how to set up their General Ledgers, financial reporting, and other issues like personnel and payroll services. While all small businesses need these services, not all businesses can afford a full-time CFO.
A Virtual CFO can be engaged for a fixed scope of work or fixed number of hours per month. The business owner pays only a fraction of the cost for the CFO because they are working part-time. This allows the business to get the support it requires for a compelling cost.
A virtual Chief Financial Officer (vCFO) is typically a practicing Certified Public Accountant (CPA) who offers high level financial consultation. Utilizing a vCFO is a cost effective way for smaller businesses to access the services of a CFO without bearing the full cost. A CFO is a strategic hire for businesses of any size to consider. It should be considered an investment, not a cost, as the true CFO will always provide a high degree of return on your investment.
The purpose of a virtual CFO is to provide expert services at an affordable price.
While virtual CFOs may not always be present on-site, they will always be available when you need them most. Having a virtual CFO will protect you against financial crises.
Direct benefits of receiving and following a vCFO's advice are improved margins, cash flow, sustainable growth, and efficient and effective operations. vCFO can act as a true C-level executive as a part of your team to enhance vendor contracts and relationships, plan for and manage debt, strategic planning, and tax risk mitigation.
A vCFO can focus on small businesses and their accounting and bookkeeping complexities when filing taxes. Generally, small business owners are unaware that their daily decisions can, directly and indirectly impact their taxes.
A vCFO will open doors of opportunity for your business. These professionals have extensive networks with other business owners that could benefit your company. They can advise on the competitive landscape and untapped opportunities and open doors to improve banking and capital raising potentials.
Having a vCFO as part of your leadership team can raise the bar of performance for the team you have in place. Working with an experienced professional will challenge your team to improve their skills and apply best practices to your operations.
A study by U.S. Bank reported that over 82% of small businesses fail due to poor cash flow management. The advice and guidance from a vCFO can prove to be the difference between success and failure.
When deciding whether you need a vCFO, business owners should consider the following four scenarios. If you are experiencing these conditions, you are ready to engage a vCFO.
As business owners look at their day-to-day operations, focusing on expense management is critical. On occasion, expense management needs to be balanced with making investments in the business. No business has ever cost-cut its way to greatness. Controlling expenses and making wise business investments is the key to success.
Investing in a vCFO will give you a leg up on managing the financial operations of your business, as well as forecasting and planning for future growth. Making decisions before the need arises is always easier. Being proactive versus reactive is a cost-effective way to run your business.
Take the time to consider adding a vCFO to your team. It could prove the best investment you have made in your business.