The survival and the future of a business depend on the decisions taken by the management. To make informed decisions, the administration would need to have access to the correct and simplified facts and figures which could be attained with the help of proper business and financial analyst such as a CFO or Chief Financial Officer. The CFO plays a vital role in the overall survival of the company and also plays a crucial part in making decisions for the future.
Many times a start-up or an SME might require the services of a CFO but cannot afford the cost of a full-time CFO. This is where a Virtual CFO or vCFO comes into play.
What is Virtual CFO or vCFO?
A Virtual CFO is an outsourced services provider who provides assistance and information in the financial matters of an organisation, similar to what information a CFO would provide. One of the critical roles of a Virtual CFO is to supervise the financial plans of the organisation and to maintain reports on the various financial activities of the organisation. A Virtual CFO will also provide you with the same facilities but since most of the clients hiring the services of a vCFO are small to medium businesses, only offering the essential functions of a CFO won’t cut it. The services that a Virtual CFO provides are as follows:
- Analysis and interpretation of the financial reports
- Overseeing the various financial functions of the business
- Offers multiple insights into the business operations allowing well-informed decisions to be made
- Behaves with a broader view of the client’s ethical and social responsibilities
- Focuses heavily on the budgeting and forecasting services
- Supports the management by providing relevant data
- Makes periodic assessments of all the potential risks
Thus, we can see that a Virtual CFO not only offers all the necessary facilities of a CFO but also provides efficient, and cost-effective solutions in half the cost of a full-time CFO. Now let’s have a look at the various characteristics that need to be kept in mind while searching for a great outsourced CFO services provider.
Benefits of Hiring the Services of a Virtual CFO
Hiring the services of a Virtual CFO will be more beneficial to a business, especially a start-up, due to a varied amount of reasons such as:
When you hire an in-house CFO, you need to pay them a huge salary plus various bonuses such as sick leave, paid leaves and other hidden costs. Providing this huge salary could be a significant difficulty for a new business or any business in general. On the other hand, the services of a Virtual CFO can be availed at a comparatively lesser cost. It would also not require much of the benefits or bonuses, and its pricing will depend on the total time he gives to your organisation.
2.Standardised Reporting and Bookkeeping
Most of the CFOs like to bring their style or flair into the document they work upon. This step may make their work easy but makes it hard for others to understand the finances of the organisation. Virtual CFOs try to adopt the most generally used best practices for generating a client’s books and reports. It makes it easy for the people of the organisation to understand the finances of the organisation and formulate a plan.
3.The Correct Fit
Virtual CFO work with various organisations and come across multiple personalities. It makes them proficient in the handling of the various kinds of people and dealing with them. This would also help them in getting their work done on time and getting concrete results without hurting the egos of the people or without causing any problem in the organisation.
Many of the CFOs in the Virtual CFO team has worked for a long time in a particular industry and has made a few connections of their own which may help them at the time of need. This networking can help a vCFO to understand the mindset of the consumers in a different and segment of the market or expand into new markets.
5.Expert and Sincere Teams
The chances are that the outsourced CFO might have generated more funds and given solutions for many of the challenges for the for various business organisations in numerous industries. Also, they would have gained a diverse experience which would make them an overall expert and would establish their credibility.
6.Steep Learning Curve
A Virtual CFO has a vast and varied amount of experience, and this allows them to always think on their feet. If they get a problem which they have not tackled in their previous endeavours, they can get a quick read on the issue and then assess it accurately to give a perfect and quick solution.
7.Vast and Varied Experience
A vCFO can boast of diverse experience in different industries and can provide you with tailor-made solutions to the problems of the business. A vCFO also provides multi-faceted insights and solutions to the current problem that the business is facing regardless of the type of industry.
The hiring of a Virtual CFO is similar to an investment for your business. If you select the correct helping-hand, they could help the company to increase the revenue ten-fold. The demand for good vCFO is also growing as there is a rise in the number of SMEs in Dubai and the adjoining areas. When we choose a vCFO, it is required that it is a reputed firm or individual.
JAXA is a certified chartered accountant firm and has teams of expert chartered accountants, auditors and specialist serving teams which can help you identify the problem with your business and can help to take remedial measures. Our highly qualified and professional staff also provides many other business-related services such as Business incorporation, VAT, Tax Service, Payroll services, etc. For any assistance regarding the various services we provide, do contact us – we’d be happy to help.