Top 5 Reasons Why Should You Hire A Virtual CFO

November 04, 2016

Top 5 Reasons Why Should You Hire A Virtual CFO

Did you know that keeping yourself swamped with work can strain your productivity and affect your business performance in a negative way?
As a small or medium sized organization, you may not have the resources available to hire a senior finance resource, despite needing access to that level of expertise.

For any company, solid financial management practices are necessary to ensure profitability. As a business owner, where should you focus your efforts- on client deliverables, or on managing your revenue well? Outsourcing CFO services could be a solution to that issue.

A Virtual CFO can provide the level of expertise you need as a part-time contracted resource. Virtual CFOs will work with you to manage and build your business by ensuring that your financial resources are well managed and available when you need them.



 5 Reasons Why You Should Consider Hiring Virtual CFO Services


1. Growing your business is your TOP PRIORITY

Even if your accounting transactions are well-handled, a lack of senior level financial oversight may be preventing business growth. A Virtual CFO will give you the senior level advice and oversight that your business needs without the cost of a full-time hire. Virtual CFOs function within your management team and provide business advice through a financial lens. This gives balance and strength to the management of your business and is key to building value.

2. Business needs constant evolving

If your business is going through a period of change, you need your financial information to be more relevant and timely. You need a senior finance person working closely with your finance team, or your bookkeeper, and you need to better identify and measure the key factors that are driving business performance. This applies whether you are a for-profit business or a not-for-profit, as both need to deliver efficiently and effectively.

3. You need your financial reports accurate 

These are all signs that your finance team or your bookkeeper may need some additional senior level support. There may be a knowledge gap, too much change and/or too high a workload which makes dealing with issues more difficult. Senior level support can help and improve confidence in your financial reports.


4. A big contract is on horizon OR your cash flow is getting tighter

If your cashflow is getting tighter or you have a new contract which is bigger than you have handled before, it may be time to hire a Virtual CFO. You need to know well ahead of time when cash may be tight or your options are becoming limited. With the right data informing your discussion and enabling you to better manage your cash, your negotiating position is strengthened with potential lenders or investors.

5. Most importantly, you wish that your business runs smoothly and everything is streamlined

Sometimes it is just your gut saying it’s time to have an expert give you unbiased recommendations with no long term commitment.

Outsource CFO Services Provides A Solution That Your Company Needs

Managing Funds

Outsourced Virtual CFO services involve a careful scrutiny of your accounts, including profits and losses. Although this may sound obvious, it is easy to neglect regular account-keeping especially when your focus may be on meeting client requirements. Managing funds is an indispensable part of generating profits. Profitability does not come only from your customers. Practices such as managing costs, reducing unnecessary expenses, and enhancing productivity also play an active role in increasing your profits.



Outsourced Virtual CFO will provide a detailed scrutiny of your revenue sources, revenue generation methods, and costs associated with revenue generation to determine areas that may be leading to decreased profitability. At a minimum, you should be able to answer the following questions about your finances:

  • Are your account sheets updated and accurate?
  • Do they reflect profits and losses accurately?
  • Are you able to identify your overhead expenses correctly?
  • Are there overhead costs that could be curtailed?

Managing Overheads

It is important to note that while overhead is necessary for a business to function, it may not be directly involved in revenue or profit generation. Thus, your travel expenses, phone bills, and client entertainment could all be categorized as overhead expenses. However, controlling overhead is not the only way to reduce costs; in fact, cutting too much overhead could negatively impact your revenue stream.


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image source:comarkeIT

Professional Virtual CFO services can help you decide if your overhead requires curtailing or not; and if it does, you have access to the expertise to advise you in deciding on how much you need to reduce your expenses.

Managing Debtors

Every time you present a client with an invoice for services rendered, it means your customer is yet to pay you. Unless there is a very strict policy for Cash on Delivery, it is highly likely that a business incurs several invoices per day, amounting to a significant number per month. Each invoice represents customers who are debtors of your company.



A collection of these invoices, or a list of your debtors, can be termed as a statement. A statement also contains other details, such as amount owed, date, and amount paid. Debtor aging is an important aspect of this statement. Age here refers to the amount of time a debt has remained unpaid.

When you hire a virtual CFO, you are better informed about the state of your company’s finances, and hence better prepared to reclaim the money. When debtor age goes beyond a limit that you fix, 30 days for example, you can contact your debtors and follow up on payment.

General Expenses Management

How do you decide whether your business is utilizing resources optimally? Or that the rates you have established for your services are competitive? When you hire a virtual CFO services, you are provided with informed advice on these types of questions.




The Virtual CFO researches your accounts thoroughly and undertakes a detailed analysis around the general expenses incurred by your business. The professional CFO is well-positioned to guide you in managing your company’s general expenses, including taking corrective action when needed.

How Do Virtual CFO Work?

Virtual CFO works with organizations in a flexible way to support their needs. This may be a regular engagement, a half or full day a week. It may be a fluctuating level of effort depending on your needs. The part time, contract nature of the arrangement makes it an affordable option that can pay for itself in sound business decisions and a stronger organization.

By working with many clients across different sectors, Virtual CFO bring you a breadth of experience and knowledge that would otherwise not be accessible. Virtual CFO truly work as part of your management team and are focused on making your business more successful.

Additional benefits

  • Financial strategy, such as the development and execution of any new or existing plans.
  • Contingency planning to help see you safely through any soft markets and customer demand crises before they can happen.
  • Business analysis to pinpoint any possible issues that need to be rectified if you want to get margins back in line.
  • Business planning to help you meet or set up long term goals as well as forecasts to aid in planning.
  • Valuable insight that can challenge the way you view your business and help it to grow.
  • Extensive knowledge with other companies that will get them asking the right questions you should think about, as well as what strategies are proven to work.

If you are a start-up or a small to mid-size business, you do not need to hire a full time CFO. Instead, consider outsourcing this function. Ideally, investigate providers with experience managing requirements of businesses similar to yours. This will give you added leverage in the form of their experience and expertise.

Shop around before you finalize your decision on a part-time CFO services provider. Some providers also offer scalability – a big benefit for small to medium-sized businesses and startups. Scalability allows you to tap into industry-standard services and infrastructure while paying only for the services you actually use. Thus, it produces immense savings on investing in infrastructure costs and costs associated with hiring and retaining trained employees.

When you opt for Virtual CFO, you receive the dual benefit of direct profitability through smart financial management combined with savings on investment costs otherwise spent on funding a dedicated CFO position in your company.


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November 04, 2016

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