These services can help improve financial reporting, planning and forecasting, and other areas.
What is virtual CFO service?
Virtual CFO services are also known as outsourced CFO or part-time Financial Management Services. They are professional services that can be delivered remotely.
They provide support to the CEO by ensuring he/she is given the best possible financial advice and informed about any financial risks or opportunities within the company.
CFOs are often the right hand man to a CEO. Their responsibilities are usually at a strategic level. They don’t get into the details.
According to a Xero study, these are the top three goals for small business owners.
According to a survey of 800 small-business owners, 42% of them want to be more prepared for financial instability.
This data can help a financial expert with experience in business support owners reach their goals through a range of virtual CFO advice and services.
Virtual CFO Services: Benefits
What are the benefits of offering virtual CFO services?
- If you enjoy helping others and are motivated by a sense of purpose, this career can be very rewarding.
- Virtual CFOs are in high demand. Small businesses want to hire them within their budget. They are less expensive, and they have minimal overhead.
- Recurring source of income: As a virtual CFO, you transform not only your own life, but that of your clients as well. You can offer different CFO services to each client.
A virtual CFO has many benefits for small businesses.
- Small Businesses will Save Money – The benefits and incentives of having a CFO in house are not charged to small businesses. Costs of services also depend on the time needed and the deliverables required by a company.
- They have a wide range of experience. This allows them to deal with any issue that may arise in an organisation.
- Flexibility – Their working hours may be adjusted to meet the needs of the organisation. A small business can pay for the time and products needed for the company without compromising on the knowledge and expertise they require.for more information visit.
What services can virtual CFOs provide?
Here is a list of the most common virtual CFO services. Please note that this is not an exhaustive listing.
- Develop a financial strategy for your client. This may include creating budgets, managing risks and setting long-term goals for a profitable company.
- Budgeting & Forecasting: Create and implement a budget for your company and take cost-saving steps. This also includes forecasting cash flow so the client can make informed financial decisions.
- Financial Reporting – Provide financial reports that give an insight into your company’s financial health. These can include balance sheets and financial statements.
- Prepare for Board Meetings – Getting ready for the meeting. You can do this by providing the board with a financial report and informing them of the current financial situation.
- Implementation and implementation of financial systems and processes: Accounting software and bookkeeping.
- Maintaining relationships with external parties. Communication with investors, banks and auditors about the financial status of the company could be part of this.
Virtual CFO services: When is it recommended?
Virtual CFO Services can be beneficial to all businesses. These factors must be considered at a deeper level.
- Growing business. Rapidly growing business.
- Small business owners are facing many changes. An experienced virtual CFO will help you to manage the financial impact.
- Revenues above£1m: A company that has exceeded the £1 million revenue mark is not considered small. Someone must be responsible for the financial management of the business so that it can scale and grow.
- As companies grow, their operations will become more complex. Having someone who can manage and improve the financial processes of a complex operation is important.
How to Offer Virtual Financial Services
Budgeting, cash flow and other services can be offered on a regular basis. Budgeting and cashflow are services that can be provided on a regular or ad hoc basis. Dealing with banks for funding ).
Use a recurring revenue model to the extent possible. This will ensure a smoother flow of income for your accounting firm.
Below are some examples of how you can provide virtual CFO services to clients on a regular basis:
Budgeting
- Step 1. Meet with your client and gather their financial assumptions
- Step 2 – Prepare and present the budget
- Step 3: A monthly/quarterly/annual service to update the budget and analyse variances
Budgeting & Cash Flow Forecasting
- Step 1. Charge a price upfront to create a budget over the next 12 months
- Step 2: Include monthly/quarterly/semi-annual/annual maintenance of the budget or cash flow forecast
- Step 3: Update the budget or forecast to reflect any changes in your business
Client Coaching
- Step 1. Identify your current situation and where you would like to be.
- Step 3: Hold your client accountable and act as a sounding board for them
- Step 3. Find a coaching structure you can offer on a subscription basis
- Step 4. Have a discussion with your client about their financial goals and determine where they want to be.
- Step 5. Develop an action plan in writing with your client
- Step 6 – Visit your client frequently to provide insights and assistance where needed.
Popular Virtual CFO Tools
Virtual CFOs are using a variety of software and apps. But the most popular ones are:
Fathom
Fathom is a powerful analytical tool for financial analysis and reporting. You can use it to assess the performance of your organization and identify areas for improvement.
They also have a forecasting tool. This software allows you to import data from MYOB QuickBooks, and Xero.
Futrli
Sage recently acquired a tool which allows users to create financial and non-financial reports and forecasts. You can create these either from scratch or by using templates within the app. Futrli is a dashboarding application that’s ideal for small to medium businesses. It allows them to track their cash flow and KPIs.
Float
Cash flow forecasting software Float allows you to see your cash flow in the present and guide future decisions. You can manage your cash flow more effectively with its integration with Xero FreeAgent or QuickBooks.
Jirav
Jirav’s business planning software allows users to quickly and easily analyze historical data. Jirav now makes it easy to create financial plans using data imported from Intacct and NetSuite. Jirav is a very good financial planner and modeler, but it’s not easy to learn.
Spotlight Reporting
Spotlight Reporting is a financial professional-designed tool that offers detailed reports on performance, customizable dashboards and three-way forecasting.
Helm
Helm helps you predict short-term cash flow. It is easy to use and accurate, with a forecast which can be modified. Veeam has an integration that lets you schedule the payment of bills directly from its platform.
How much does it cost to hire a CFO who is outsourced?
A virtual CFO should cost at least £1000/month. However, it can go as high as £10,000/month for a full-service. Hiring an external Chief Financial Officer is not the only way to get the same financial expertise. If you’re having trouble figuring out what to charge for a virtual CFO, check out this guide.
