Sat Mar 18, 2023 | | CFO Services, General

Virtual CFO Services: A Smart Choice

Virtual CFO Services

These days, business owners, managers, and investors are seeking any way possible to reduce overhead and make every dollar count. And as businesses look for ways to curb unnecessary spending, many are now turning to virtual CFO services as a money-saving alternative to in-house financial leadership.

So, what are virtual CFOs, what do they do, and how can they help your small business? We look at what a “virtual CFO service” is and why hiring an outsourced financial professional may be your organization’s best strategy.

What Are Virtual CFO Services?

Virtual CFO services are outsourced, cost-effective financial management solutions tailored to your specific business needs and financial goals. Depending on what you’re looking for, outsourced or remote CFO solutions can provide the bookkeeping, monitoring, consulting, and other deliverables needed to rein in expenses, identify opportunities and achieve long-term financial health for your company.

In short, the right virtual professional can perform the same analysis, management, and reporting functions of a full-time CFO but without an on-staff financial executive’s payroll and salary costs.

What Does a Virtual CFO Do?

Virtual CFOs typically perform various specific, ongoing tasks to ensure that you’re operating at maximum efficiency.

These include, but are not limited to:

  • Metrics analysis and financial reporting, including key performance indicators (KPIs)
  •  Controller services and accounting system oversight
  • Annual budgeting
  • Cash flow management and controlling costs
  • Debt planning and labor cost management
  • Participation in board meetings

 More broadly, seasoned virtual CFOs provide various finance-related solutions to ensure that you make the best-informed decisions possible. These often include:

  1.  Hiring and managing the controller. A dedicated service provider will help identify and oversee the experienced, reliable financial leadership personnel needed to keep teams focused and working toward your objectives.
  2.  Achieving accurate and complete reporting. A reliable and effective CFO will ensure timely, accurate financial reporting, which is the key to maintaining transparency, achieving compliance, and avoiding costly legal and ethical issues down the road.
  3.  Providing CFO consulting services. Whether it’s hands-on coaching or step-by-step financial guidance that you need, a proven virtual CFO service provider will deliver the expertise to plan and prepare for the future — as well as a pivot when new challenges come your way.
  4.  Supporting the financial team. Skilled virtual CFOs can provide crucial support to existing accounting and budgeting staff — helping to resolve issues, improve processes, and develop solutions that maximize efficiency.
  5.  Competitive positioning. An experienced provider will help identify redundancies, reduce waste, manage cash flow, and unlock opportunities for improved efficiency and growth, positioning you ahead of local competitors.

Depending on what you need, a top-rated CFO services company may also help with:

  • Complex transactions (mergers & acquisitions, employee stock ownership plan (ESOP) transactions)
  • Fundraising
  • Managing other finance-related systems (such as IT)

It’s important to outline expectations and ask about such offerings beforehand.

Key Benefits of Virtual CFO Services

Virtual CFO services offer businesses in a variety of industries numerous advantages. Companies that utilize these services typically gain accurate financial data, increased cash flow, easier access to capital markets, and more stable finances. With access to virtual CFO services, companies can reap these rewards and more.

Virtual CFO services help business owners make accurate forecasts and budgets, and they also help them find places where they could improve to make more money. Furthermore, more intricate operations require good management expertise, something virtual CFOs can provide through detailed financial analysis and reporting.

Virtual CFO services help businesses make good decisions and plan for the future by giving them a unique mix of strategic planning and good financial advice. Furthermore, virtual CFOs keep business owners abreast of current economic trends, keep an eye on competitors, and understand how they use money efficiently to succeed. Having this insight gives entrepreneurs an edge over those without access to these services by outmaneuvering those who do.

Although small businesses can benefit from not hiring an in-house CFO, larger organizations will also find value in having reliable access to up-to-date data, which allows them to run more efficiently and save money.

Businesses can reduce the risks they face and improve how well they manage their money and do their jobs by using virtual CFO services. As businesses continue to change with the times, these services are becoming more and more important for organizations that want to do well.

Now that we’ve talked about the main benefits of virtual CFO services, let’s look at the different kinds of services that are available and how they can be changed to fit your business’s structure.

Types of Virtual CFO Services

With the help of advice from experienced financial experts, virtual CFO services give businesses a chance to get a better handle on their finances and use their money more efficiently. No matter the size or type of organization, everyone can benefit from quality advice tailored specifically to their needs. Virtual CFOs usually provide two main types of services: strategic and operational.

Strategic virtual CFO services are designed to increase a business’s competitiveness and help it reach long-term growth objectives, such as entering new markets, creating products, getting new customers, and planning investments. Budgeting, predicting cash flow, analyzing a company, investing in capital equipment, and other things are all examples of strategic services.

Operational virtual CFO services help businesses manage their day-to-day finances and short-term goals, like making sure payroll deadlines are met, paying taxes on time, and keeping an eye on expenses. They often include accounting tasks like reconciliations, accounts payable and receivable management, inventory system updates, bookkeeping solutions, and financial statements.

No matter which service you select for your business, virtual CFOs can help elevate financial operations to the next level and maximize performance and profitability. As businesses look ahead, it is critical for them to consider how budgeting advice from an experienced financial advisor could help manage costs efficiently while maximizing return on investment.

Over 30% of small business owners reported that a virtual CFO helped boost their organization’s cash flow.

A study released in 2018 demonstrated that businesses with a virtual CFO were able to make informed decisions 50% faster than those without one.

Recent research indicates that companies using virtual CFO services can see up to an 11% reduction in tax payments compared to those without one.

What Does a Virtual CFO Cost?

Generally, CFO service pricing varies based on the type and extent of the services you need. Because outsourced CFO services are usually offered as required and tailored toward client demands and budget, you’ll likely pay far less than it would cost for full-time executives hired internally. 

Reputable CFO companies usually perform a brief initial assessment of your business and its stated objectives, transactions (volume and complexity), and reporting requirements before recommending solutions or charging any fees.

outsourced CFO services

How Does the Process Work?

Once hired, your outsourced CFO services provider usually begins the onboarding process, which can take anywhere from several weeks to a few months. They will evaluate your business, financial situation, and goals during this time.  They will build reporting models and clean up the books and records. From there, your virtual professional will often prepare reports highlighting areas to keep an eye on, followed by recommendations for improving stability, efficiency, and performance.

With onboarding over and the proper framework in place, your provider should then deliver agreed-upon services on a weekly and/or monthly basis, including holding regularly scheduled meetings to review progress, discuss financial reports, and update your team. Financial and performance reporting frequency depends mainly on your company and its business requirements.

Processes may also differ based on the number and complexity of transactions and any unique services you require throughout the relationship.

Regardless of the solutions you’re receiving, the right professional person should provide thorough, detailed reporting throughout the process, maintaining open communication to keep you informed and updated from start to finish.

Why Should I Hire a Part-Time CFO?

Of course, hiring a CFO solutions provider instead of an in-house chief financial officer depends primarily on your specific business, financial situation, leadership preferences, and objectives.

That said, choosing virtual CFO services to help with anything from budgeting and cash management to financial forecasting can have numerous benefits for your small business, including:

  • Avoiding the permanent overhead and compensation expenses of hiring an in-house executive.
  • Expert management and evaluation of your finances, cash flow, financial statements, and budgeting process
  • Consulting and advice from seasoned professionals who know your business and keep you focused on your goals
  • Accurate, on-time financial reporting and risk management that will ensure transparency and compliance 
  • Invaluable insight into your company’s financial data and how it stacks up against competitors
  • The support of experienced financial professionals when and where you need it most
  • The opportunity to customize your solutions and pay only for what you need

Virtual CFOs do much more than manage the books and double-check financial statements. With the right provider on your side, you will have the insight and experience to make better financial decisions, protect your company, and grow your business.

Virtual CFO Services You Can Trust

More than ever, startups, small businesses, and mid-sized companies are looking for ways to improve efficiency and save money. And with many firms operating in automated environments and relying on a remote workforce, the demand for virtual professionals is at an all-time high.

At CFO Strategies, we provide comprehensive, affordable virtual CFO services that fit your business, ensuring you have the expert financial and performance reporting and controls to meet deadlines, keep up with competitors, better serve clients, and pursue success. Whether part-time remote, full on-site or a blend of both, we customize each solution to meet your needs and budget while delivering the results you deserve.

To learn more, please contact us at CFO Strategies today at (855) 732-7861. We can match you to a member of our team who possesses the talents and knowledge that your company or organization requires.