All You Need to Know About Virtual a CFO

As an organization grows, its financials become more complex. As the financials become more complex, it becomes difficult to measure and manage cash flow, production costs, inventory, payroll, and other critical financial information and tasks. This is why many organizations grow themselves right out of business. They are not capable of maintaining the financial controls and systems essential to operate efficiently and effectively. As a result, they make company decisions based on inaccurate, incomplete, and outdated data.

If you feel that it is becoming challenging to manage the financials of your company, but you are not ready to hire a full-time Chief Financial Officer (CFO), a Virtual CFO might be a perfect solution.

What is a Virtual CFO?

Just as the name suggests, a virtual CFO is someone who performs the services of a CFO, however, instead of providing those services in person, as a full-time employee, a virtual CFO does so remotely, typically on less-than-full-time schedule. They are data-driven executives who can make the connection between your business operations and their influence on generating cash. They are a great consultant and easy to work with.  They also must be highly skilled in using technology to automate and report key metrics.

​Small and Medium Enterprises that employ a Virtual CFO get access to a qualified financial professional at a lesser cost of a full-time CFO. The amenities will differ from business to business, but mostly a virtual CFO will-

  • Handle all the responsibilities of a traditional CFO, but work slightly and on a part-time basis
  • Monitor the fiscal health and well-being of the company, usually with cloud technology
  • Offer financial understanding and guidance on all business decisions and issues
  • Provide back-office tasks such as managing accounts ledgers, conditional to the client and their needs

A virtual CFO can also safeguard a continuous transition between CFOs. If your CFO is retiring or pursuing another opportunity, or you are preparing to make an alteration, a virtual CFO can get up to speed on your financial systems and procedure and undertake the tasks of your CFO on a temporary basis until the new CFO has been employed and on-boarded. A virtual CFO can even help you evaluate applications and resumes, so you hire the right person.

Why your Business Need a Virtual CFO?

The list mentioned above includes information, task, and discipline that are grave to your organization. If you don’t have a handle on one or more things on the list, you are increasing the risk of cash flow issues, audits, compliance violations, and disputes with the vendors, employees, and business partners. Here are a few advantages you can avail by hiring a virtual CFO for your business.

1.Cost control

If you hire a virtual CFO, it will help you to control costs by getting only the services you require, when you need them, without the need to roll benefit and other terms of employment into the equation.

  1. Customize according to your needs and budget – A virtual CFO Service can tailor the skills and possibility of work necessary to fit the company at hand, without paying for anything that is not needed. These services can also be shifted as required as your business grows and changes.
  2. Diverse expertise – A virtual CFO sees countless different financial situations and resolves several various economic conundrums. Chances are, whatever your unique case, your virtual CFO will have seen it, or something similar, before giving necessary advise

Now, do all businesses need a virtual CFO? Well, here are a few questions to be answered before you make a decision.

Does your company capture and record all financial data in the right place?

Are you successfully collecting and organizing the accurate data that your accountant will need for tax filings?

Is your accounting software performing what you need it to perform?

Do you know what commodities are performing finest?

Do you know your exact labor and manufacture costs?

Are you able to precisely measure, track, and analyze your profit margins by product line?

If you are not sure about the solutions to the aforementioned questions, you should consider hiring a virtual CFO. You might need to have existing systems and processes to be reviewed and optimized. Otherwise, it might be essential to build or rebuild them from scratch.

We at JAXA are a certified chartered accountant firm based in the UAE. Our experts are qualified specialists in the field of accounting, and auditing and can help identify the problems arising in your business and provide effective solutions. Contact us today- we’d be happy to help you.