What is a Virtual CFO?
A virtual CFO is an off-site, part-time CFO providing high-level financial strategy services. A virtual CFO will help with financial forecasting, systems optimization & reporting, maximizing profits and shareholder growth, preparing for transactions, and more. A virtual CFO is often a better hire for small- or mid-sized companies since they can benefit from the high-level financial strategy of a CFO without the expensive in-house costs.
What Does a Virtual CFO Do?
Unlike an accountant or bookkeeper whose primary job is debits & credits, and unlike CPAs whose primary role is tax strategy, a virtual CFO has a forward-looking financial approach. A virtual CFO helps take your existing capital and revenue and use it to accelerate your growth, maximize your shareholder value, and drive business success.
Here are some of the main services offered by a virtual CFO:
- Financial Forecasting: Should you hire a new employee? Or open a new location? These decisions make or break businesses all the time. A virtual CFO can create a financial forecast, both short and long term, so you don’t pull the trigger too soon–or too late.
- Employee Education: A virtual CFO can train your employees to support your financial strategy so everyone is rowing the same direction. Your virtual CFO can also find a permanent CFO when the timing is right, either by training a pre-existing employee or finding someone from outside the company.
- System Optimization: Timely, relevant data can make all the difference in making timely, relevant decisions. A complicated or labor intensive system can lead to errors and hinder your ability to get the information you need. A virtual CFO can analyze your needs and find a system that will enable rather than hinder your financial growth.
- Profit Maximization: Far too often, small business owners lose money without knowing where the “leaks” are occuring. A virtual CFO will review your cash flow, vendor contracts, payroll strategies, and so on to uncover practices that are losing money and thereby maximize your profits.
- Sustainable Growth: Grow your company too slow and you’ll get beat out by the competition. Grow too fast, and you won’t have enough financial support to make it last. It’s a delicate balance–one that a virtual CFO can help you navigate.
- Raise Capital: Often, raising debt or equity capital is necessary to take your business to the next level. A virtual CFO can help determine how much should be raised and in what debt-equity combination, help make key introductions for the raise, help you negotiate terms, and create a game plan for the most effective way to use the money.
Whether you’re looking for ways to cut expenses or want to grow your business, you don’t have to hire an in-house CFO for the expertise. Hiring a virtual CFO gives you access to the financial insight and strategy of a full-time CFO, without the full-time paycheck.