Does Your Business Need A Virtual CFO?Shuchita Gupta
Are you able to competently track and analyse your company’s growth and profits? Do you understand how to use this information to your business advantage? Are you able to complete and report accurate financial information in a timely manner? Do you know all the compliances required by a company?
If you answered no to any or all of the above questions, you should consider bringing a CFO on board. Now if you are running a start-up or a small business, you might be wondering the cost attached in hiring a full time and experienced finance officer. Well that’s where the concept of the ‘virtual CFO’ was created to solve your dilemma and reduce the cost to the company.
How does a Virtual CFO work?
Virtual CFOs supervise and guide the young finance and business teams to set up robust process for recording and reporting of sales, purchase, costs etc. work remotely, they work seldom on a full-time schedule and they effectively act as an outsourced finance head. They deploy their strategic experience and services to a diverse set of clients, when they are starting out and have limited transactions. To be able to try, test and finalise the needs of the business, so that they can scale to any number of transactions with the same accuracy, as of today. With virtual CFO, start-ups and small businesses are able to harness the expertise of a highly skilled professional at a fraction of the cost as compared to retaining a full-time employee. The virtual CFOs on the other hand are able to provide their expertise to a diverse set of clients, splitting their costs and time among them.
What are the capabilities of a Virtual CFO?
A Virtual CFO is a seasoned Finance professional with enough experience and expertise to provide your small business with much of the same services and expertise as an in-house CFO, only at a fraction of the cost. When you hire an in-house CFO you have a regular salary to pay each month. Whereas, a Virtual CFO provides your business with the services that you need, as you need them and whenever you need them. Contracts typically range from 1-3 years.
How does a Virtual CFO help start-ups?
Virtual CFO doesn’t come in the way of payroll.
Most start-ups face issues of hiring staff and retaining them. It is very big problem as they have limited staff and limited budget to pay them off (as they only have Angel funding). One option is to hire people with less experience or freshers, who are unable to contribute much. Once you hire an accountant, the company tends to get dependable on the person. And if the person decides to move on, continuity of information and growth could become an issue for the organisation. With a virtual CFO on board, the challenges of hiring, training and retaining are fairly well taken care of.
Virtual CFO offers Value added services
While virtual CFO trains and set up processes for basic accounting to be taken care of by young professionals (working full time or outsourced), he/she adds value by providing strategic reports and insights to the founder / CEO. Most outsourced accounting professionals provide value added services like periodical MIS reporting i.e. predefined report sent at regular intervals i.e. stock statements, debtor ageing analysis, sales mix, product mix which helps SME or start-ups to make better decision.
Virtual CFO lets you Focus on your core business
While growth in terms of customers and sales are crucial for a startip, proper audited Financial
statements along with all compliance documents like TDS, GST, ITR, ROC compliance, PF, ESI etc.
become a necessity at the time of Series A/ Series B funding. Once accounting is outsourced startups
can focus on their core business and stay relaxed for their accounting and compliance needs as they
have been given to the experts. With all that in good hands, companies’ leaders get more time to
focus on core business and new business initiatives.
Virtual CFO offers service options as per your business needs
Different start-up have different needs. An ecommerce apparel company has a very different set of financial needs than, say, a services firm. The reports, processes and forecasting that these two businesses need will be very unique. A virtual CFO service can customize the skills and scope of work necessary to fit the company at hand, without paying for anything that’s not needed. These services can also be shifted as needed as your business grows and changes.
Hiring a virtual CFO allows companies to control costs by getting only the services they need, when they need them, without the need to roll benefits and other terms of employment into the equation.
A virtual CFO can help you navigate through different growth phases form a financial perspective. Chances are whatever your unique situation is, your virtual CFO has already accomplished the challenge – so the guidance comes easy and accurate.
A Virtual CFO possess the expertise and ability to work with your team by offering guidance in
accounting, sales, training and evaluations of staff, as well as future strategic planning. So bring on
board a virtual CFO, today and make the most of their services!
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