Virtual CFO services are becoming more and more popular from scaling small businesses. Whether they are looking for additional expertise or struggling to hire an internal CFO that can fulfill their goals, working with virtual CFO services can be an excellent option that can help small businesses acquire the strategic business advice they need.
What are Virtual CFO Services?
Just as the title suggests, a virtual CFO is a person who performs the services of a CFO or chief financial officer; however, instead of providing those services in person, as a full-time employee, the virtual CFO does so remotely, typically on a less-than-full-time schedule.
Who Needs Virtual CFO Services?
The number of startups has ballooned in the past decade, with technology paving the way for more entrepreneurial activity than ever before. In the tech sector alone, the number of US startups grew 47 percent in the last ten years.
Limited capital and a lean operation are typically some of the defining characteristics of startups; as such, the need has grown for a way to work with niche professionals, like marketers, strategists, and accountants, at an affordable cost.
With outsourced virtual CFO services, young companies are able to harness the expertise of highly skilled professionals at a fraction of the cost of attracting a full-time in-house CFO. The party being outsourced (like a virtual CFO), on the other hand, is able to provide their expertise to a diverse set of clients, splitting their costs and time among them. It’s a win-win for both parties.
Virtual CFO services are also beneficial to companies in need of a wider range of financial management tasks. If your business does not have a handle on one or more of its financial matters, you’re increasing the risk of cash flow issues, compliance violations, audits, and disputes with vendors, employees and business partners. You may want to answer the following questions to determine if Virtual CFO services are right for you:
- Is all necessary financial data being captured and recorded in the right place?
- Are you effectively collecting and organizing the correct data that your accountant will need for tax filings?
- Is your accounting software doing what you need it to do?
- Do you know what products and services are performing best?
- Do you know your exact labor and production costs?
- Are you able to accurately measure, track and analyze your profit margins by product line?
- Do you know how to use this and other information to make better business decisions and become more profitable?
If you are unable to answer any of the questions listed above, it may be time to call upon virtual CFO Services.
What Makes Virtual CFO Services Possible?
So how are virtual CFO services even possible? Many small business owners are wary of virtual CFO services due to the fact such an important person won’t be present all the time for their business. But, thanks to cloud accounting technology, virtual CFO services are also becoming easier for accounting firms to offer. With increased time savings and real-time access to high-quality data, accounting firms that leverage cloud technology are well-positioned to step into this role for their clients.
Having already disrupted the traditional business model, digitization and the cloud are becoming the order of the day. It has become imperative for enterprises to embark on their digital journey, and the cloud is the catalyst that drives innovation and sets them on the right path. Here are some of the benefits the cloud can offer your business:
- Enhanced efficiency
- Interoperability
- Flexibility
- Scalability
- Data security
- Reduced costs
- Business agility
Benefits of Virtual CFO Services
A virtual CFO’s scope of work for a company typically depends on the company’s size and unique financial needs. It is common that a virtual CFO is paid by the hour or via a flat monthly rate. There are many benefits to hiring virtual CFO services to help manage your growing small business’s financial position.
1.Control Costs
Since businesses are always looking for ways to stay lean, one of the biggest benefits of virtual CFO services is the ability to control costs. According to salary.com, the average salary for a chief financial officer in the United States is around $364,000. As a small business owner, that number might make your eyes bug out! Pair it with other essentials, like benefits and bonuses, and you’re looking at a hefty price tag to hire a full-time CFO.
Hiring a virtual CFO allows you to control costs by getting only the services and expertise you need, when you need them, without the need to roll benefits and other terms of employment into the equation.
2. Grow with Your Business
One of the best parts about using a virtual CFO solution is that it can grow with your business. Your needs at the $2 million revenue mark will be different than your needs at the $12 million mark, and so on. Virtual CFO services can help you navigate through different growth phases form a financial perspective. Additionally, a virtual CFO can help transition your company from an outsourced to an in-house chief financial officer position when the time comes.
3. Customization
An athletic apparel company has a very different set of financial needs than, say, a business attorney. The reports, processes, and forecasting that these two businesses need will be very unique.
Virtual CFO services can customize the skills and scope of work necessary to fit your business at hand, without paying for anything that’s not needed. These services can also be shifted as needed as your company grows and changes.
4. Diverse Expertise
Virtual CFO’s work with an array of different clients, enabling them to gain knowledge and expertise across numerous industries. As a client, you’ll benefit from this diverse pool of experience and expertise.
Your virtual CFO sees countless different financial situations and resolves a number of diverse financial conundrums. Chances are, whatever your unique situation, your virtual CFO will have seen it, or something similar, before and can advise you accordingly.
Limitless Investment and Capital’s Virtual CFO Services
At Limitless Investment & Capital, our virtual CFO’s will help your company grow sales, cash flow, and profit. Our Virtual CFOs can drive growth and profitability for your company anywhere from 5 to 36 hours per week, based on your needs. Depending on the size and the growth stage of your company, we provide a flexible engagement model, enabling you to increase/decrease engagement levels, thereby giving you the opportunity of having the best CFO talent assisting you, based on your needs.