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The pandemic has left a lasting impression on the business world, especially on the financial sectors which in turn has affected the operational unit of many organizations. 

To thrive in such an intense environment where competition and complexities among businesses are increasing, technological disruptions and functional costs are becoming higher than ever, the organizations have modified their way of conducting business operations & procedures.  

Having a strong customer base won’t be enough to achieve your long-term goals. You need to have an in-depth understanding of your business’s financial health and what comes under your business’s necessities to achieve its goal financially.

To overcome the uncertainties the pandemic has left behind, organizations are shifting towards more flexible models to handle the finances that align with your business goal, among which one such model is to hire a Virtual Chief Financial Officer (VCFO).

Who is a Virtual CFO?

As an Outsource Service provider, Virtual Chief Financial Officer or VCFOs is here to provide the professional expertise to fulfill the financial requirements of your organization. They can either be a single person or an entity that analyzes the company’s financial strength and weaknesses, is aware of financial dangers and opportunities, and proposes strategic directions accordingly.

Such highly qualified and experienced financial professionals are tremendously beneficial for start-ups, and small and mid-scale enterprises, as they get the flexibility of opting for high-skill assistance for their financial and strategic planning.

Even larger corporations can hire virtual CFOs to look after their joint/subsidiary ventures in navigating the complexities, tax compliance, and cash flow management.

Hiring a Virtual CFO is like an investment in an organization. If selected correctly, they act as a helping hand in increasing the revenue tenfold.  

What Services Do Virtual CFO Offer?

Let’s take a closer look at some of the more popular VCFO services-

• Virtual CFO acts as Liaison And Communicate With Third-Party Vendors.
  • Looks after tasks linked to inventory management including – the record of purchased orders, monitoring items reordering lists, communication with vendors regarding pricing alteration
  • Handles requests and payments of third-party vendors. 

• Budgeting and Forecasting.

• • Developing budget & implementing cost-saving methods.
  • Forecasting cash flow management to make informed financial decisions.
  • Helps organizations in attaining capital.

• Periodic Reporting
  • Establishing an MIS reporting system to assure that a system highlights the key performance areas of business.
  • Provides authentic, well-documented, concrete, and valuable insights, ahead of specified deadlines to the management. 
  • Follow up record after boosting capital.   

• Tax and Other Legal Compliance–
  • Ensures that a business is compliant in terms of income tax, GST, and law.
  • Make sure your business never misses a deadline concerning the filing of tax returns.
  • Meet corporate governance and other regulatory compliances.

• Financial Management
  • Involves managing the day-to-day operations including fund management, cash flow management, treasury management, payables, and receivables management.

• Strategic Financial Planning 
  • Financial planning lets organizations achieve both short-term and long-term business objectives. 
  • Creates a strategic financial roadmap.
  • Identifies financial benchmarks to set revenue and profitability goals. 
  • Evaluating the effect of operations on the overall financial position of your organization at present and in the future.

• Develop Financial Analysis and Business Models
  • Create business models to predict the impact of a future event like policy change, market disruption, the profitability of business unit, and break-even analysis 
  • Get clarity on market considerations and future investment decisions.

• Maintain Relationships with external parties
  • Includes Banks, investors, and auditors to communicate complex data and the company’s financial status.

• Analyzing an organization’s cash flow management
  • Determine the necessary expenses and analyze where and how much to spend on your expenses.
  • Ensure that the prices are aligned with your company’s financial budgeting.
  • Increases the revenue and growth of the business.

Benefits of Virtual CFO Services.

Hiring VCFOs has numerous benefits as they’re responsible for the financial health and strategic planning of your organization. Thus, here are the top reasons to hire a virtual CFO–

• Access to Varied Industry Knowledge and Expertise
• Cost Efficiency depends on work type, deliverables, and time duration. 
• Flexibility & engagement whenever required during special projects, mergers or acquisitions, and policy development. 
• Improved Financial Decision-Making
• Task Delegation for successfully running all aspects and sectors of business.
• Performance Management by implementing IPM and KPI approaches as per the complexity and size of the business.
• Working Capital Optimization and increased profitability.
• Accurate financial reporting and statements are helpful for activities including mergers, acquisitions, and special projects.
• Assessment of Debt and fundraising by undertaking financial modeling and tax optimization.
• Optimized Financial Transaction process through automation for quick and effective decision-making.
• Forecasting budgets and strategies to execute financial decisions.
• Quick Integration.
• Regulatory Compliances and internal filings.
• Identify untapped resources to increase revenue and growth. 
• Access to their rich network of professionals, investors, and other industry contacts.
• Liaison with External stakeholders and professional services.

Signs when your business is ready to hire a Virtual CFO –

Knowing exactly when to hire one largely depends on your business finances, growth, and expansion plans. Here are some surefire signs to discover when to hire a Virtual CFO for your business- 

• Constant concerns about cash flow management

If you are an SME, mid-level, or an organization that is changing to manage and predict the cash flow of business, having a Virtual CFO by your end would be beneficial to look after the modifications.

• Looking for more insight into your business finances

VCFOs not just act as financial advisors, but also help your business by gaining valuable information about current financial systems, detailed reports on income and expenses, and suggesting ways to help you acquire your goals and let your business flourish.

• Lack of time to focus and handle other areas of business 

Since time is considered money, you need to focus your energy on other aspects of the business as well and allow the Virtual CFO to manage the finances of your organization and continue to scale up without any roadblocks & worries about the other aspects of the business. 

• You Can’t Afford a Full-Time CFO

Cost is the basic concern of almost every organization. So Why should any business lack experience in having top-level expertise and skills of a business financial advisor that they can get under a fraction of the cost?

• Identify And Exploit Opportunities

Virtual CFO services will allow your business to identify and exploit opportunities through financial forecasting, capital investments, strategic decision-making process, acquisitions, creating and analyzing budgets, and developing policies that ensure you reach closer to your goal.

• Your Company Finances Are a Mess

Whenever you feel like you’re struggling with messy company finances, you should consider hiring a virtual CFO. As when businesses expand, so does the finance and sometimes it can become overwhelming. From handling day-to-day financial activities to developing strategic plans and sorting all the obligations, Virtual CFO will help you in evaluating the best plans that can serve your business objective.

Wrapping Up

With the advent of digitalization, no matter at what stage your business is, having a Virtual CFO by your side will ensure that every process flows smoothly and counterbalance the potential risks.

Figure out what all businesses’ key financial challenges are and what areas of improvements you expect your VCFO to work on, since what doesn’t get measured, doesn’t get managed. 

Work with your VCFO to determine key metrics and specify time-bound goals to denote what success for your business will look like.