Businesses in Southfield, especially small ones, suffer a lot due to the inability to afford an industry expert who could oversee and manage all the accounts and finance-related work being carried out at the business and support informed decision-making.
Fortunately, small businesses and startups can turn to virtual accounting services Southfield that also provide virtual CFO services at a fraction of the cost of hiring a full-time CFO. What does a virtual CFO do, and what are the inherent benefits of hiring one? Let’s find out!
Exploring the roles and responsibilities of a virtual CFO
A virtual CFO or VCFO is a finance and accounting expert who remotely provides outsourced services to businesses to help them with financial decision-making and other financial needs. Unlike a full-time CFO, you can engage and disengage a VCFO as and when needed while expecting the same solutions and services as a full-time CFO.
- A virtual CFO provides financial advice and guidance to the businesses to facilitate appropriate financial planning and growth for the businesses. It helps senior administration to focus on the critical areas of the business.
- Virtual CFOs also help businesses determine the break-even point (the point at which the cost of production equals the total revenue) and allow businesses to control various costs.
- A VCFO also looks over the monetary bookkeeping of the business to check its financial health.
- Cashflow forecasting is also the responsibility of a VCFO as it provides businesses with insight into current and future cash positions and enables informed decision-making.
- A virtual CFO also helps businesses limit their expenses by breaking down variable costs, identifying areas for optimization, and implementing cost-effective strategies.
- A virtual CFO can look after budgeting to keep track of the business operations by examining spending patterns and recommending changes to enhance profit maximization.
- A virtual CFO ensures effective financial communication between management, clients, shareholders, and stakeholders.
- A VCFO also ensures that the business complies with all the regulations and follows all the applicable laws.
Who should hire a virtual CFO
Just like an in-house CFO, a virtual CFO ensures that business owners and senior administration get the correct financial advice that could pave the path to the growth of the business. It makes a virtual CFO highly suitable for the following.
- Small businesses: Although small businesses may not require the service of a full-time CFO, a virtual CFO can help them with budgeting, forecasting, and financial planning to scale the business quickly.
- Startups: Since startups have limited resources, they may not hire a full-time CFO. Therefore, a virtual CFO is a perfect choice for a startup that seeks professional guidance at affordable prices.
- Non-profit organizations: The financial structure of a non-profit organization can be very complex and require specialized guidance on fundraising, financial reporting, and compliance from a professional at an affordable price
- Professional services: Professional service providers like consulting firms or law firms that may not have enough resources can also hire a virtual CFO to get services similar to those provided by a full-time CFO.
- E-commerce businesses: E-commerce businesses have to manage inventory and cash flow, which asks for accurate financial planning, expense management, and forecasting. A virtual CFO can provide all such services at a fraction of the cost of hiring a full-time CFO.
Benefits of hiring a virtual CFO
While there are several benefits of hiring a VCFO, the following ones outweigh the others.
- You get flexible support as you can engage and disengage a virtual CFO as per your business needs.
- You don’t have to pay a full-time salary to a virtual CFO, which can help you save overhead costs and benefits associated with a full-time CFO.
- A virtual CFO can provide you with expert guidance and tailored insights and help you develop strategies the same way as a full-time CFO.
- A VCFO can also create long-term strategic financial plans that can align with the overall goals of the business.
- Also, a virtual CFO can identify present industry trends and help businesses make informed decisions.
Summing up
Hiring a virtual CFO offers multifaceted benefits to businesses as they offer solutions similar to those offered by a full-time CFO at a very low cost. They can bring industry-level expertise and help your business grow at an exponential rate and survive the cut-throat competition.
