A Chief Financial Officer or CFO is responsible for managing a company’s finances. They are in charge of bookkeeping, investments, and tax consultation if required. A virtual CFO provides all these services, but remotely. Having a CFO on direct payroll can be difficult for a small business.
However, the same services can be provided periodically and over virtual platforms, mainly through web portals and video conferences. The business owners only have to pay for services as and when they need them.
Here are some of the functions that a virtual CFO can perform for the betterment of your team.
1. Making Forecasts
If you are a new entrepreneur, chances are you do not have anyone on your team to understand market predictions and help you make investments vital for your business expansion in the future. A virtual or remote CFO can help you by bringing about strategic developments in the financial department.
They can help you by creating budgets and invest your capital by making sound financial forecasts. Without this guidance, you can feel positively overwhelmed when managing all aspects of your business finance. You will be able to manage business risks by making better and more informed decisions.
2. Helping with Cash Flow and Expenses
For a business to keep on functioning smoothly year-round, regular cash flow is a priority. But given the nature of the product or service that your business provides, there can be slow periods in your business. This is the time to stock up on your inventory so that you can meet the demand in the peak season, but you need cash flow for that.
A virtual CFO will tell you where to invest your money so that you get timely returns to run your business year-round. Business expenses are constant, but in the same way, the CFO will also tell you how to save money during slow periods.
With an expert at the helm, you will have complete transparency about your incoming finances and outgoing expenses without having to compromise on any aspect of your budget at all.
3. Keeping Track of Business Processes
As your business grows, you would have to spend more on business development, but that cannot be done alone. You have to manage employee payroll, pay your vendors, meet your investors, pay the bills, manage taxes, and acquire the necessary permits and licenses, apart from the daily bookkeeping activities.
When your business starts growing, a regular accountant can’t keep track of all the various channels that your business finances slowly start diversifying into. A virtual CFO will go through your financial documents and help you keep everything on track every few weeks, as per your designated schedule.
Hence, if you do not have the funds to hire a full-time CFO, a virtual CFO will help you in the same ways, just remotely. You will lose nothing by outsourcing the services. You will gain more since virtual CFOs are far more updated than full-time employees in certain respects since they are in a more dynamic field. You will still benefit from industry information and get sound financial advice for your business but at much lower costs.