Brief Overview of Virtual CFO
Category : Services
The backbone of all businesses is good financial management. It allows companies of all levels to measure performance, launch profitable marketing campaign, and even expand the business when everything is indeed manageable. For medium or big corporations, the financial department of the business is usually handled by chief financial officer. For small companies, particularly startups, hiring a professional to fill the position can be financially impossible; in this case, it counteracts the idea behind creating manageable business. With today’s well-developed technologies, however, it is not uncommon for companies to work with virtual CFO to allow for efficient financial management via could accounting method.
For a small company, hiring full-time CFO makes no financial sense simply because this position requires proficient experienced professional who always comes at a price. On the other hand, there must be someone who has high level of financial expertise to help the business grow. Instead of taking unnecessary risky hiring, the most viable solution is virtual CFO.
Before we dive in to more details, it is worth mentioning that virtual CFO is an entirely different thing from finance outsourcing. Virtual CFO works on-demand basis, meaning the service is provided as one-time assistance to handle all financial-related tasks including but not limited to management accounting and company performance analysis. With finance outsourcing, the entire financial management is handled by an external provider under an on-going and usually long-term contract.
Similar to full-time CFOs, the primary role of their virtual counterparts is to oversee or analyze financial planning, make reports on financial activities, and manage financial risks. Depending on the agreement with employer, a virtual CFO can also provide other services such as setting up KPIs, bookkeeping, suggesting controlled expenditure, and to take responsibilities for the accuracy of the report/analysis.
The term virtual is typically understood as any activity done within the notion of Internet. In virtual CFO case, the employer can be a company located million miles away, but good line of communication is well-maintained thanks to the Internet. A virtual CFO does everything by cloud accounting, meaning all the financial analysis reports are done, sent, and received without requiring the presence of both parties in the same place.
Because the services are provided on-demand, small companies can afford to make efficient hiring. A virtual CFO usually charges the employer on hourly rate, but because virtual CFO works only when needed, employer can greatly reduce the expense on salary.
Contact us to know more about our services and how we can help you achieve your KPIs