What are Virtual CFO Services and How do they Bring Down Costs?
The Finance Department is one of the most crucial pillars of any business. While it has made perfect sense in the past to have an in-house finance team run by a dedicated CFO, modern corporate environment places more emphasis on cutting down on costs. This has given rise to a new outsourcing model of company finances known as the Virtual CFO Services.
What are Virtual CFO Services?
Virtual CFO stands for Virtual Chief Financial Officer. The aim of these Virtual CFO services is to help companies outsource their financial management needs. As the name suggests, such services provide high skill assistance in financial matters, just like a CFO at a large organization does.
Such services include the likes of the following:
- Financial and Strategic planning services for clients
- Overlooking day-to-day financial activities
- Generating and presenting reports on these activities
- Maintaining the books of clients
- Interpret and present information from the financial books
- Suggesting measures to control firm expenditures
- Acquiring capital at the lowest possible cost
- Enhancing revenues and profits
- Analysis and recommendations about future growths
- Merger and acquisition insights, strategy and support
- Development of Business Plans
- Relationship Management with Banks
- Management of short term and long-term cash flows
- Budgeting and analysis of various company departments
- Forecasting about the future and projecting project costs and profits
- Operational and infrastructural improvement
- Synchronising of processes and operations across departments
- Suggesting ways to strengthen internal financial controls
- Improve accuracy and timelines of financial reports
Virtual CFO solutions came into existence mainly to bring down the financial maintenance costs of start-ups and SMEs. It can prove to be extremely costly to maintain a whole finance department and hire a CFO to overlook its functioning. While large companies might not think twice before investing in this domain, small companies like SMEs and start-ups often find it highly challenging to hire a CFO. Hence, Virtual CFO Services come to their rescue by considerably bringing down the costs through an outsourced model.
Benefits of Virtual CFO Services
Virtual CFOs are a new age concept that were particularly developed to provide services to SMEs and start-ups. Here are the various benefits offered by them:
1. Reduced Costs
What is better than hiring an expensive CFO? Hiring a part-time CFO. But CFO Services take the game even further by bringing down the costs even lower. These services are tailor-made to reduce costs and the best part about hiring them is that they will enable you to realize the ROI on your investments even quicker than before. They are similar to other services that operate on a remote outsourcing model which makes the technology available to the vast majority of the companies. A variety of different packages can be chosen from that meet your requirements and fall under the purview of the financial budgets. All you have to do is match the package with your company’s needs.
2. Professional Financial Advice
It is often seen that the financial books of companies are in a state of utter chaos even after having a whole in-house team in place. If this is the case for you, then Virtual CFO Services for start-ups are your best bet. They deploy professional financial guidance and management for your company’s needs. Bad and inaccurate company reports can lead to loss of revenues and profits year after year. By giving you and your business access to a dedicated financial expert, all your financial issues can be easily resolved. This is especially true for SMEs where it is often challenging to find talented professionals at low job packages.
3. Timely and Accurate Reports
Reports help the management in taking crucial company decisions. Generating untimely and inaccurate reports will be no use to the management and lead to decision making with a lack of actual insights. CFO Services for small businesses come to your rescue here by automatically generating pivotal financial reports as and when you need them. This makes it easier to allocate timely budgets for the various departments and meet expectations.
4. Saved Opportunity Cost
Since Virtual CFO Services take the hassle of financial management out of the hands of internal company management, the opportunity cost created by the involvement in financial matters is taken away. Hence, management can now focus on other important tasks which might have been in their pipeline for long. This is especially the case with SMEs where core team members often wear multiple hats of responsibilities and can do with some extra time on their hands.
5. Customized Services
You can hire the exact services that you are on the lookout for with zero spill over. This means that you don’t have to pay for packages with a plethora of services, most of them being the ones you may never use. Packages can be customized and tailored to your needs. This further bring down the costs and enables you to strategically target specific arenas that need assistance.
6. Unbiased Perspective
Internal company management may sometimes be more inclined towards personal agendas rather than the collective good of the company. This is not the case with Virtual financial planners since they offer unbiased management techniques and a fresh set of perspective in a highly professional setting. This is especially true if your business is in a state of financial setbacks and no apparent solution can be developed by the internal financial team or CFO. Since Virtual CFO service providers work with a diverse range of companies and handle challenging projects, financial guidance and techniques that are relevant to your case and industry can be availed. Experience always counts and such service providers have no dearth of the same.
Virtual CFO services are changing the landscape of financial management within companies. SMEs and Start-ups in the current market are particularly in profitable conditions. Not only such services provide expert opinions and professional financial management techniques, they also take away the hassle of finances and helps managers as well founders to focus on more crucial tasks such as bringing in more business. This gives you complete control over your budget and financial requirements.
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