What does a virtual CFO do?

Not too many businesses have their own chief financial officer, or CFO, – but you might still need the help of someone in a similar role. A CFO would usually help direct financial operations at your business and attend a regular meeting with directors to report on the financial performance of the company.

By outsourcing this role, you can get many of the benefits of an in-house CFO without the large salary required. This is an increasingly popular service at SME, but we’re often asked what it actually involves.

A virtual CFO will be able to do the following for your business:

·       Find a way to help you see exactly what financial position you’re in at any moment.

·       Work out how to get the essential numbers into your systems so that can happen – this week we helped a client import all her inventory to Xero so she can keep track of her sales at a glance.

·       Create financial forecasts to help you plan and organise your cashflow.

·       Help with the structure and governance of the organisation.

·       Work out where your money is coming from: your gross profits, net profits, most profitable items or services, what’s making you money and what’s inefficient.

·       Know where your money is going: your payroll, taxes and the costs of what you’re selling; where you can cut back and where you might need to spend more.

·       Give you budgets and goals for the coming month and the year, plus strategic and business plans for the longer term.

·       Create financial documents that show lenders, investors or potential buyers how successfully your business is operating and how much more growth it might have.

Your virtual CFO will attend – physically, or virtually – a monthly or quarterly meeting to report on the business’s financial performance, just like a full-time CFO would. Because this service can be offered at a fixed monthly (or quarterly) price, it can be worked into the budget along with your other costs.

This is a serious value-adder, because once we’re in those monthly meetings we can help you with a fresh perspective and a hard look at the profitability of your business model, among other aspects. At its most basic, a virtual CFO means you’re not burying your head in the sand. It’s almost impossible to grow your business if you don’t know your financial position right now or what it’s likely to be in the coming months. By giving you some outside guidance, a virtual CFO can lift your business out of the mire of day-to-day sales and give it new direction and momentum.

Give us a call today to find out more about what a virtual CFO could do for you.