Virtual CFO, fractional CFO, outsourced CFO – whichever term you are familiar with, they all refer to the same role; a Chief Financial Officer, or CFO, or works outside of the business.
Business owners and hiring managers need to be savvy when it comes to making the best decisions based on company needs and budgets, and that’s where outsourcing comes in. Here, we’ll discuss the key details about virtual CFOs, their role, and how companies can benefit from outsourcing to fill the position.
The Role of a VCFO
A virtual CFO, or vCFO’s, role is aligned with that of a standard in-house CFO. Professionals working in this high-up position generally directly assist the CEO, helping to guide business decisions based on financial strategy.
They focus on the bigger picture of financial management, without honing in on smaller, less-impactful issues. Some aspects of the business’ financial management they might oversee include cashflow management, business forecasting, financial analysis and reporting, and risk management. This can vary depending on the needs of the company, but overall, the role of a CFO is to strategise with the intention of enhancing profitability and driving financial growth for a business.
There are a few ways in which a virtual CFO’s role differs from that of a traditional CFO:
Remote hours
A virtual CFOs hours are based around the company’s needs, and they fulfill their tasks remotely. In smaller companies, vCFOs generally don’t have the same level of work to do as they would in more complex businesses, so there isn’t a need for them to work full time hours. Because of this, vCFOs usually work part time for a company.
Clients
Since virtual CFOs work part time, they usually have multiple clients or companies who they work for. While some may view this in a negative light, it actually means that these professionals often have diverse experience and expertise, which can be incredibly helpful with problem solving and strategising.
Contract employment
VCFOs aren’t directly employed by the companies they work with, and operate as contractors. This means that they actually run their own business, and sell their virtual CFO services to other companies. Working this way allows vCFOs to set their own fees or negotiate these with potential clients.
A benefit of hiring a contractor is that they are responsible for ensuring that they get paid a fair wage, and also for making their own super contributions, managing their annual leave, and paying their own bonuses. Thanks to this, these costs don’t fall on the businesses who hire them. This is part of what makes hiring a vCFO so attractive to business owners who require the services but need to stay within a strict budget.
Who Can Benefit from a Virtual CFO?
You may find yourself wondering what types of businesses can benefit from having a vCFO as opposed to a full-time internal CFO. There are a number of benefits of enlisting these services, particularly for small or quickly-growing companies.
Businesses who are only starting out likely won’t need or have the budget for a CFO or virtual CFO. Oftentimes, companies that are starting out can have their financial needs fulfilled by other roles, such as those in the accounting department.
When small businesses grow and begin making around $1million in revenue, that is usually the time when contracting in a vCFO becomes worthwhile. This is because as businesses and inner-workings become more complex, having a team member whose sole focus is on long-term financial success will help in making more strategy-focused decisions.
Finding a VCFO for Your Business
At Stones Sharp, we offer expert financial services to help you and your business thrive, as shown by many of our past clients’ experiences. By working together, we can connect you with a virtual CFO to identify opportunities and fine-tune strategies for your businesses ultimate success. Contact Stones Sharp today to begin planning for your business’s future with the help of a virtual CFO.
FCPA & CA
Shane is a Fellow of the Australian Society of Certified Practicing Accountants and a Chartered Accountant.
Shane’s passion is to consider the clients, the client’s business and taxation affairs with a holistic approach whilst providing business mentoring, business strategies, systems development, taxation advice and taxation planning in order to assist his clients and their business achieve their goals.
