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What Is A Virtual CFO?

What is a Virtual CFO?

If you’re launching a startup, there are a number of roles that you need to fill straight away such as CEO and marketing manager.

Many startups choose to leave the job of hiring a Chief Financial Officer, or CFO, until later.

The CFO is responsible for managing the financial actions of your business, but many startups don’t have the budget to bring someone on board full-time.

This is where hiring a virtual CFO could make a lot of sense for small companies. Read on as we look at 10 reasons why you should hire a virtual CFO.

A virtual CFO is a person or business that offers the services of a CFO, but does so remotely through phone calls and video conferences, and usually on a part-time basis.

This allows a company to get the benefits of having a CFO without having to pay someone to fill the role full-time. It allows a business to fill the gap until they’ve grown to the point when then they can hire a CFO full-time.

If you’ve got a full-time CFO then you’re already in safe hands. A virtual CFO isn’t going to offer anything you don’t already have. If you’re lacking a CFO, however, then hiring a virtual CFO comes with a number of benefits.

1. Broad Expertise

Virtual CFOs work with a wide range of companies, in different sectors and of different sizes.

All of this means that a virtual CFO has a broad range of expertise that they can bring to the table.

2. You Gain Access to Their Contacts

Since your virtual CFO has worked with a wide range of different companies, they will have developed an extensive network of contacts.

You may be able to leverage some of those contacts to help your business. Your CFO will know exactly the right people to put you in touch with.

3. An Outside Perspective

When you’re growing a business, you have a laser focus. Sometimes someone with an outside perspective can see things that you may miss.

Hiring a virtual CFO gives you a fresh pair of eyes who can not only revamp the financial side of your business but may also be able to spot other opportunities for growth.

4. Shallow Learning Curve

When you bring a full-time CFO on board, it can take some time for them to get up to speed.

There will also be a bedding-in period as they get to know their colleagues and how everyone likes to work. A virtual CFO has experience of coming on board with new businesses, so will be quicker to adapt. The learning curve will be a lot shallower than when adding a CFO full-time.

5. Manage Your Costs

One of the most obvious benefits of outsourcing virtual CFO services is that it can save you money.

You can hire your virtual CFO for however many days of the week you need them. When you’re starting out, there’s no need to provide office space for another full-time employee. Once you’ve grown enough, you’ll have the money and the space to bring a full-time CFO on board.

If you can’t afford a full-time CFO when you’re first starting out then a virtual CFO could be the solution.

6. Customized Service

With virtual CFOs, you only pay for what you need.

That means you’re getting a customized experience that is providing exactly the services you want without any of those than you don’t need. Since you’re only paying for what you need, this is another area where you can make significant savings.

7. Scalability

As your business grows, a virtual CFO can grow with you.

You may start off only needing their services one day a week. As you become more successful, it’s simple to increase this to however many days a week you need.

As you grow even further, you may be unsure about when to hire a CFO full-time. Your virtual CFO will be able to offer you guidance on this, having experienced the same situation with other clients.

8. Advice on Software and Systems

There is a huge range of financial software and systems available for businesses. There’s so much choice it’s hard to know where to being.

A virtual CFO will have had experience with a wide range of different systems and products. They will be able to give you first-hand advice on which systems are the best fit for your business. It will save you from making the potentially expensive mistake of choosing the wrong option.

9. Instant Experience

As a startup, very few of you are likely to have much experience.

A virtual CFO, on the other, will have been there and done that. By outsourcing your CFO services, you’re effectively bringing instant experience on board. That experience could prove vital, especially when it comes to making major financial decisions.

10. Problem Solving

Every business will face difficult problems to overcome as they grow.

A virtual CFO will have seen, and overcome, many of the most common problems that businesses face. They will be able to bring that experience to the table and help you get past your problems in the most efficient way.

By tapping into the expertise of a virtual CFO, you’ll have the benefit of not having to learn from your own mistakes.

If you’re looking for a Virtual CFO for your business, then we’re here to help.

We can bring the benefit of best practices and existing resources. Our services include financial reporting and analysis, budgeting and forecasting, and service provider relationships.

Engagements can range from one day a week to 3-4 days a week, with the flexibility to end the arrangement at any time after a 6-month contract. Ideally, this will be when your business has grown enough to need the services of a full-time CFO.

Contact us today to learn how we can help you realize your growth potential.

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