Virtual CFOs, sometimes referred to as Fractional CFOs, are finance experts that are responsible for developing long-term financial strategies for your business. A virtual CFO manages the existing accounting staff and sets the tone for how smoothly a company's finances will flow. As head of the finance department, this person typically does not handle any bookkeeping or accounting work. They gather the data needed from the existing accounting team and use that information to grow your business.
So what do Virtual CFOs spend all their time doing? Here are a few of their top priorities.
Forecasting
A Virtual CFO spends most of their time creating financial models that improve your businesses ability to see into the future. There are many models these CFOs builds, but the most important one is a cash flow forecast. Knowing how your decisions today will effect the business' future cash flows, is one of the most important insights CFOs provide.
Business Decision Analysis
Virtual CFOs are a great sounding board for small business owners. When questions arise such as, "can I add another employee", or "should we lease or by that piece of equipment," CFOs are there to run the hard data and provide you with real answers.
Strategic Planning
A CFO is the CEO's right hand man. Therefore, these business leaders work together in crafting the business' long term strategic plan. These plans outline where the company is expected to be in 5-10 years and the steps the company must take in order to achieve these results.
Manage Bankers and Company Shareholders
When your company is looking for additional capital, whether through traditional banks or by providing equity to new shareholders, a Virtual CFO is there to see the funding go through. These individuals have relationships with lenders and leverage their network to secure the cheapest financing available.
Operations Consulting
One of the most valuable reasons to hire a Virtual CFO, is for their operations consulting expertise. These individuals have the ability to look at your entire operations from an independent view. There are no ties to individual employees or processes. They simply look at ways to make the overall operation improve and take actions to produce better results.
Contracting A Virtual CFO
Virtual CFOs have a lot to offer when it comes to helping small businesses. Before you hire your first CFO shop around and make sure you find the right fit for your company. Many businesses offer a free consultation, take advantage of these giveaways! Doing your homework will pay off and enlighten you on whether your business is ready for a CFO or not.
Comments