During your time as a small business owner, you may have heard the term “virtual CFO” come up in your research or in funding rounds. There are many benefits of a virtual CFO, but for this article, we have chosen our top ten.
What Does a Virtual CFO Do?
Before we begin listing virtual CFO benefits, it’s worthwhile reviewing what a virtual CFO actually does for your business. Virtual CFO services provide all the benefits of a CFO without the commitment of hiring a full-time employee.
Like a regular CFO, a virtual CFO provides consulting on strategy, investigates measures to increase net returns, and helps with forecasting, cash planning and improves systems & processes. They have access to and can create valuable business relationships with individuals and organizations that can help grow your business.
A virtual CFO differs from a traditional CFO in that they are hired on a part-time basis. Because you may need your CFO more often at certain times (e.g., year-end or growth periods), many virtual CFO companies offer flexible contracts to ensure your CFO is there when you need them.
1. Cost Savings
The chief benefit of a virtual CFO is cost savings. Virtual CFO rates are a fraction of what a full-time CFO would need to earn. Because you pay a virtual CFO for contact time, you only pay for time they spend working on your business. With full-time CFOs averaging a salary of six figures, a few thousand for a virtual CFO seems like a steal.
2. Flexibility
As a small or medium business, you don’t always need a CFO available every business hour of every day. With a virtual CFO, you have flexibility on how often you interact and pay a rate based on that. If your needs change, you can simply adjust your contract time as needed.
3. Experience
Since they work with so many different clients, one of the virtual CFO benefits is the wealth of experience they have. Virtual CFOs work with a handful of clients from a variety of industries. With that wealth of experience, they gain a wide range of insights that they can apply to all of their clients.
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4. Independence
Because a part-time virtual CFO is not a full-time employee, they won’t simply tell you what you want to hear. With organizational independence, your virtual CFO will tell you how it is, and how it needs to be. Since your virtual CFO can’t become enmeshed in office politics, they won’t play favorites or be afraid of making difficult decisions.
5. Team Consulting
When you hire a virtual CFO for your small business, you not only get the wisdom of your CFO, but also the entire team they work with. Virtual CFO companies are stacked with qualified experts ready to assist you.
6. Standardized Reporting
Since your virtual CFO has worked in various industries with many clients, they will have developed standardized financial reports. Given that they’re so battle tested, these reports will be inclusive of everything you’d need to know as a small business owner.
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7. Quicker Onboarding
A virtual CFO is used to many things a full-time CFO might walk away from. They are used to walking into a mess, hitting the ground running, and working with tight deadlines. Where you might need to get your business “ready” to onboard a full-time CFO, a virtual CFO is ready for anything.
8. Credibility and Connections
A virtual CFO develops many connections and builds a solid reputation representing the financial interests of many clients. They bring this credibility and network with them to help with things like securing funding, finding professionals, and even creating B2B relationships.
Credit: Lukas Blazek
9. Budgetary Control
A virtual CFO will give you a plan to get your finances under control. No more working on a spreadsheet and a prayer. Your virtual CFO will set you up with proper accounting and budget forecasting software to manage your finances the right way.
10. Growth
With a clearer financial picture, your business can be ready for growth. With clear budgeting and strategy, your virtual CFO will put you on track to realize tangible gains. When your business gets large enough to hire a full-time CFO, your virtual CFO can consult during the hiring process
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Hire a Virtual CFO From Michigan CFO
A recent Brainyard survey of 166 CFOs reported that the top challenge they faced was juggling too many responsibilities. How do you expect to take on those responsibilities yourself while also operating a business?
Michigan CFO has been providing businesses just like yours with virtual CFOs for over 15 years. With 191 clients served, our virtual CFOs have the experience to tackle any financial challenge your business may be facing.
Whether you’re in a funding round, preparing for your taxes, or just feel overwhelmed with accounting, a virtual CFO is a great way to solve your financial issues.
For more information on the services we offer, contact us today to schedule a consultation.