As per the Telegraph’s analysis, more than 60 percent of new-age companies fail to survive within the first three years due to poor financial management. After all, optimal cash flow, data-driven financial projections, and uncompromised financial monitoring also play a vital role in a company’s success. The bigger companies typically hire full-time CFOs to manage their financial affairs. Small companies or most startups fail to do so because of the massive cost. That’s where the Virtual CFO comes into play. They possess the same expertise and skills as a traditional CFO but cost surprisingly less. Let’s explore some of the frontline benefits of a VCFO service, reinforcing why startups must hire them.
Who is a CFO?
The Chief Financial Officer is a senior professional who takes care of the company’s financial affairs. A CFO’s frontline tasks include monitoring cash flow, evaluating past data and trends, and generating reports. They are well-versed in overcoming process bottlenecks and maintaining optimal cash flow.
What is the Role of Virtual CFO?
A Virtual CFO caters to all the chores of a traditional CFO while working remotely. Simply put, it is like outsourcing the finance head of the company. Hiring them is easy and cost-effective, unlike a full-time CFO. Virtual CFOs are fully competent and have the expertise to perform all finance-related chores vital to keeping the company up and running. They can also help organizations set budgets, pinpoint market trends, procure funds, and create financial projections.
Benefits of a VCFO Service
The need for structured financial planning and cash flow management soars with time as your company grows. Seeking growth or expansion without proper financial planning is like shouting in the void. You must have sound growth strategies based on realistic financial projections and current fiscal standing to stay ahead of the curve. These tasks are typically handled by the Chief Financial Officer (CFO).
Their primary job is centered around keeping things up and running from a financial standpoint. The Virtual CFO offers the same expertise at half the cost of hiring a full-time CFO. Hiring them simply means no more substantial salary, benefits, bonuses, and office space. Let’s take a detailed walkthrough of the benefits of a VCFO service in regard to hiring a full-time CFO.
Reduced costs
VCFO service costs vary per the company’s requirements, specifically based on the scale of operation and paperwork threshold. However, no matter how complicated or daunting your finance department is, VCFO service always costs less than hiring a full-time CFO. You can hire them on a pay-as-you-go basis if required.
Flexibility and scalability
Although the financial department needs constant administration, you can avail of VCFO services for a fixed time and cost, giving you better control over expenses when scaling up.
Technological integration
A reliable VCFO service leverages cutting-edge technology, including data analytics, ML, and AI[1], to maximize efficacy and improve performance. They are well-versed in accounting standards and creating realistic financial projections.
Budget control
Virtual CFO services consider budget allocations to create detailed budgetary analysis reports, allowing you to track spending and control the company’s budget effectively.
Increased cash flow
Virtual CFO services can overcome bottlenecks contributing to the compromised cash flow. After identifying potential pain points and non-performing assets, VCFO implements the required changes to maximize cash liquidity. The seasoned VCFO digs into the financial structure and spending patterns and provides actionable solutions to boost cash flow.
Diverse industry experience
Seasoned virtual CFOs typically have more knowledge and experience gained from various industries. You may find them serving multiple businesses concurrently. This rigorous work nature helps them access valuable insights and scenarios, keeping the company’s finances afloat no matter the conditions.
A team of CFOs at your service
VCFO service providers typically have a team of CFOs serving different industries simultaneously. However, they can allocate more than one CFO if the requirement arises, ensuring no obstruction to your finance workflow. Unlike a full-time CFO, this option will help you leverage the combined expertise of several seasoned CFOs, leading to better performance.
A vast network
Most experienced CFOs typically have a robust network of financiers, lenders, and other economic experts, allowing them to procure funds easily when required. This is particularly beneficial for companies seeking funds for expansion.
The ability to handle any challenge
With diverse experience working with different companies across different verticals, virtual CFOs can overcome any scenario you think is uphill. Their ability to resolve worst-case scenarios is second to none. Even the new challenge cannot outperform their expertise and skill.
Conclusion – Benefits of a VCFO Service
Hiring Virtual CFO services is an excellent decision for a budget-savvy company. They are knowledgeable and have the required skills and expertise to handle financial chores with ease and transparency. You can hire them to identify pain points, devise a robust budgeting plan, or craft a pitch to lure some investments. The benefits of a VCFO service are virtually endless if you are scaling up and venturing into a new market. Get in touch with the experts of Adviso for more information.
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