As a business owner, you know that your time is best spent on what you do best: running your business. And when it comes to financial matters – which are critical to keeping your business in operation – you know that your accountant is your greatest ally.
However, you may have also reached a point where you’re thinking about hiring a CFO. While you can hire someone in-house, there are some advantages to choosing a virtual CFO.
But what are virtual CFO services, what are their benefits and are you ready for them?
What are Virtual CFO Services?
Virtual CFO services are exactly what they sound like – professional services that are delivered remotely.
Unlike a traditional CFO, virtual CFOs are not employees of the business. They are outsourced professionals.
Like their traditional counterparts, virtual CFOs support the CEO by providing financial advice. The main difference is that they work remotely and typically on a fractional basis. They are still able to help you better understand your business, identify opportunities, and help you become aware of potential economic dangers it may face.
Virtual CFOs can provide a wide range of services, including but not limited to:
- Financial and cash flow analysis
- Identifying opportunities for growth
- Helping CEOs understand where they’re spending money
- Creating financial goals to help businesses grow
- Creating a budget
- Handling financial reporting and board meeting preparation
When you hire a virtual CFO, one of the first things they will do is review your business’s finances and overall goals. Once they understand your fiscal operations, they will get to work making recommendations on how to streamline processes and improve profitability.
Your virtual CFO will play an important role in your business decisions. They can help you understand where your business is financially and whether it’s headed in the right direction. They can be the one to help you know what levers to pull and when.
How Can Your Business Benefit from a Virtual CFO?
There are many advantages to working with a virtual CFO:
Cost Savings
One of the biggest advantages of working with a virtual CFO is cost savings. A traditional CFO becomes a part of your staff, which means that you’ll incur all of the expenses that come with hiring, like salaries, benefits and bonuses.
CFOs make, on average, $320,932 per year in salary alone.
Virtual CFOs are third parties who offer their services for a fee, and that’s the only expense you’ll incur. At Redmond, our virtual CFO services are based on a fixed fee. That way you can always know what it’ll cost you every single month. There won’t be any surprise expenses.
When you work with a virtual CFO, you’ll also save time, which allows you to focus on growing your business. Saved time is saved money in the business world.
Expertise and Experience
Virtual CFOs bring a level of experience that an in-house employee may not be able to offer. In addition, these individuals work with clients from a variety of industries, so they bring substantial expertise to the table when they become a part of your team.
Access to a Team of Professionals
Another great advantage of working with a virtual CFO is gaining access to an entire team of professionals. These team members have different perspectives, levels of expertise and knowledge, all of which you can leverage to make better business decisions.
Having access to a team also means several individuals can answer your questions and review your reports.
And if someone from your virtual CFO team leaves, there will still be other members of the team who know and understand your business.
2 Signs Your Business is Ready for a Virtual CFO
As you can see, there are many benefits to working with a virtual CFO, but are you ready for one? Here are two signs that you are ready:
1. You’re Spending Too Much Time on Financial Tasks
Managing your business’s finances takes a lot of time. If you’re spending more time managing your business’s finances than growing it, this is a good sign it’s time to hire a virtual CFO.
Hiring a CFO will save valuable time that you can spend on core tasks, and you’ll gain expert advice in the process.
2. You’re Worried About Cash Flow
If you’re struggling with cash flow forecasting and management, a virtual CFO can help you get back on track.
It can be a challenge to create accurate forecasts when you’re just starting out or you’re making big changes to your business. An experienced virtual CFO can step in to help you get a clearer picture of your cash flow now and in the future.
3. You Want Strategic Support
If you’re wanting someone to help provide strategic, financial guidance around the best way to grow your business but you aren’t ready to commit to a full time CFO, a virtual CFO is a fantastic option.
Final Word
A virtual CFO can benefit your business in many ways by providing expertise, time savings and the ability to tap into opportunities you may have otherwise missed.
To learn more about virtual CFO services or how we can help you with your accounting needs, schedule a consultation now!
