Benefits of Virtual CFO: 10 Benefits of Hiring A Virtual CFO
Hiring a Chief Operating Officer (CFO) will have a huge impact on your business. A CFO will take all major financial decisions of your business. This includes financial planning, investments, saving, etc. A Virtual CFO can be an individual or an entity that acts as a CFO of the Company on an ongoing basis. The Virtual CFO model is common in start-ups where there is either no need for a full-time CFO, or where start-ups can’t afford a full-time CFO. This article discusses the benefit of Virtual CFO:
Benefits of Virtual CFO
You have complete control over deciding the job of a virtual CFO. You decide the number of hours, nature of work, required experience, type of engagement (hourly, fixed retainer) etc. On top of this, you do not need to provide office space or any added benefits.
Benefits of virtual CFOs include the ability to hire an entity as opposed to an individual. You can then decide how many minds you wish to engage in a particular task.
One of the main benefits of virtual CFO is financial saving. Let’s suppose you require a CFO to manage your ongoing compliances. You estimate this task will take 30 hours per week. In this case, it does not make sense to pay for a full-time employee.
The best thing, in this case, is to hire a virtual CFO and pay for the services you need. There are no contract terms set in stone. You can always request more time and work depending on the business.
Virtual CFOs generally have more diverse work experience. Since virtual CFOs work part-time, they can work at multiple businesses at once. Using a virtual CFO model enables you to tap into the expertise of these CFOs, at a fraction of the cost of a full-time CFO.
Apart from this, virtual CFOs can be entities. This ensures that multiple minds are involved in solving problems. This is not possible while hiring a traditional CFO. Such diverse experience will greatly benefit your business in the long run.
Virtual CFOs work for many clients and have a rich network with successful businesses. If needed, they can leverage this to help your business. This network is even more powerful in the case of entities. This means that you can benefit from a wider network which would not be available otherwise.
Virtual CFOs are experts in business and finance. They are fully qualified to take on leadership roles at companies. Due to this, they can effectively plan and execute financial decisions. This will forecast the financial numbers and budgets of your company.
6. Quick Integration
Benefits of virtual CFO include quick integration with the existing team. As virtual CFOs work for many teams at once, they easily get along with new teams. Also, as they provide on-demand services, there is no need to spend time introducing them to the whole office. You can limit interaction based on needs.
As the business starts to grow, the owner will no longer be able to do all the work alone. Delegating tasks becomes crucial for successfully running the business. You can easily delegate all the work related to the company’s finances to the virtual CFO.
Generally, virtual CFOs work for startups and small companies. Due to this, virtual CFOs are willing to take on work that a regular CFO might not.
A business is liable for various compliance measures. These are very technical and require an expert’s insight. Virtual CFOs will take care of regulatory compliances and internal filing.
Apart from this, virtual CFOs also create customized templates for submitting reports to clients. This is very valuable for defining your brand. Additionally, this ensures that the client receives all the relevant information.
This is one of the primary benefits of virtual CFOs. You can hire a virtual CFO in an on-demand or part-time manner. This ensures that you are getting the maximum value for your money. This is particularly great for small businesses which do not require a full-time CFO.
As discussed above, on-demand services are more cost-effective. This means that you are paying less but getting more in return.
10. Increased Revenue
Virtual CFOs are experts in finances. Benefits of virtual CFO include a major increase in revenues. They will help you identified untapped sources of growth. Along with this, virtual CFOs will guide the business to ensure adequate financial savings.
The benefits of virtual CFOs definitely outweigh the potential risks. Due to this, hiring virtual CFOs has become very common amongst startups.
Here is a quick rundown of the top 10 benefits of virtual CFO:
- Virtual CFOs are more flexible in their demands, and they can easily work as per the needs of the client.
- Hiring a virtual CFO means you only have to pay for the services needed. This is cost-effective as you do not need to pay for a full-time employee.
- Fractional or part-time CFOs work on multiple projects at a time. They have a more diverse experience as compared to traditional CFOs.
- They have a rich network that they can use when needed by the business.
- Many of them are financial experts. They can look at the costs and revenues of the business to estimate the financial future.
- Virtual CFOs quickly integrate with the team due to their experience. Further, part-time work requires limited interaction with the entire business.
- They are trained to work on a wide range of tasks. You can delegate work depending on business needs.
- Virtual CFOs ensure easy and effective regulatory filing. They employ standard templates that different teams can use.
- Unlike usual CFOs, virtual CFOs provide on-demand services. This means that you get the maximum value for your money.
- They make financial decisions that can maximize revenue at minimum cost. This will lead to an increased cash flow for your business.