There comes a time in every business where your small business gains momentum. Your sales figures soar high, but still, you cannot make much profit. You find it difficult to understand where you went wrong. The only way to clear this confusion is by hiring a virtual CFO.
Now, you might wonder why hire a virtual CFO? To help you understand the significance of a virtual CFO, let us first look at what a regular office day looks like for a virtual CFO. Once you understand it, we can look at why virtual CFOs are a must for small businesses.
Tasks Performed by a Virtual CFO During an Office Day
If you think a virtual CFO’s life is boring, think again! The word virtual makes the position a bit lighter, but it is significant in managing your small business. Here is how the day of a virtual CFO starts:
Cross-Verifying Your Overhead Costs
The first thing that a virtual CFO ideally does is to check where the overhead costs are coming from. Once they have the information in hand, they control these overhead costs. They become part of your accounting team and look after the indirect costs of your business.
Preparing Forecast and Performance Reports
Once the virtual CFO understands where the overhead expenses are coming from, they try to reduce these overheads.
The best way to do that is by preparing forecast reports that mention the future financial figures your SMB wishes to achieve and then tallying them with the actual performance. This helps your business stay on the right track and control financial outcomes.
Devise Strategies to Grow Revenue for Your Business
The virtual CFO next develops strategies to help you ace your business. They will take corrective measures to increase revenue and cut down on unnecessary costs that are slowly depleting your business.
Ensure That Your Business Liquidity Does Not Get Impacted
The last important thing that a virtual CFO will do for your small business is to provide regular cash flow updates by considering the receipts of your business and the payments to be made. This will ensure that your business stays liquidated at all times.
From the daily activities performed by virtual CFOs, you might have understood the significance of this position in your small business. If you are still not convinced, we will try to put all your doubts to rest once you go through the last section of this write-up.
Clear Reasons Virtual CFOs are Game-Changers for Your Business
Cost-Effective
The best thing about this position is you get high-level financial guidance without needing to hire an onsite resource for your business. This saves the different overhead costs, like electricity, that can be used to improve your business.
You also save big time on training and benefits that on-site employees expect at a minimal level while coming to the office. Plus, you end up getting their top-notch financial advice whenever you want.
Get Correct Strategic and Financial Advice
We are seeing things not panning out the way businesses want worldwide. In such a situation, you must take wise calls so your business does not disappear. This requires flexibility in thinking.
A virtual CFO can help you make educated decisions based on your business’s financial and strategic management. Think of a virtual CFO as your main hand that will provide you with the right guidance even in adversity.
Access to Real-Time Analytics to Make Wise Business Decisions
When you are going through disruption, you need data and analytics in front of your eyes to get the real picture of where your business is heading.
You can access an all-inclusive modeling and internal reporting framework by hiring a virtual CFO from a reputed accounting firm like DFK Benjamin King Money. This gives you the right picture of where you are currently standing in your business.
The models help you get relevant information on your key financial metrics compared to industry standards. This helps you make the correct financial decisions and decide when to expand your business.
Organize Your Financial Information
Before hiring a virtual CFO, you might find it difficult to access the right financial statements due to the clutter around. It can even be due to the heavy workload, so you cannot take time to dig deep into the financial figures.
The best thing a virtual CFO does is provide financial reports weekly, fortnightly, or even monthly. They glance at your systems and finances to suggest corrective measures for the long-term sustainability of your business.
Provide a Good Support to the Executive Team
Even though you have an executive team to help you make the right decisions, they might not have time to focus on the bigger picture due to their busy nature. This is where a virtual CFO can help.
They can set up a monthly board meeting and provide a sense of structure to your core leadership group. They always support the executive team to make your business reach new heights.
Tap Into Specific Transactions
Due to many transactions being made on your regular day at work, you might find it difficult to track a specific transaction that occurred a few months back. By hiring a virtual CFO, you can get a workaround solution to this problem.
They will help you steer through different types of transactions seamlessly. These can be related to capital raising, valuations, ESOP arrangements, and mergers. They may even perform specific CFO-related activities to grow your business.
When Do You Plan to Hire a Virtual CFO for Your Small Business?
Still, wondering if it makes sense to hire a virtual CFO? Don’t procrastinate! Take the first step, and rest assured, we will help you ease off all your financial struggles and suggest ways to excel in your small business. Contact us today and see your business shine through the hard economic times the business fraternity faces worldwide.
