by Rob Joseph, Director, BeaconCFO Plus
These days, just about everything has gone virtual. We are live streaming concerts and family events and logging on to Zoom for telemedicine appointments and business meetings. With the prevalence of all things digital, you might hear peers talk about working with a virtual CFO and assume they are using some kind of an online financial service during the pandemic—but to be clear, that is not what virtual CFO services are.
In skill and purpose, a virtual CFO is really no different from an in-house CFO. He or she simply works on a part-time or contractual basis rather than full time. While some of our outsourced CFOs may be working remotely—and virtually—at this time, others will work in your office in accordance with your specific needs. Perhaps that is one day a week ongoing or full time for a set period of several months. Regardless, a virtual CFO is a living and breathing member of your team—a partner and advocate—whether he communicates from behind a screen or in person.
So, with that said, why would your business ever need the services of a virtual CFO?
Reason 1: Your small business lacks in-house financial leadership.
This will come as no surprise, but full-time CFOs are expensive. The average total compensation for a CFO—including base pay, bonuses, incentive compensation, benefits, and more—can total close to half a million dollars annually. With that price tag, it is not hard to understand why many small businesses go without the input and guidance of senior financial leadership. Virtual CFO services exist to fill that gap. Your small business can gain the invaluable financial knowledge and advocacy of a CFO at a fraction of the cost of hiring one full time.
Reason 2: Your business is growing—and getting more complex.
When your business is just starting out, you may be able to handle the finances on your own or with the help of a bookkeeper or accountant. But as your business grows, so do your risks, challenges, and decisions. Bringing in a part-time CFO to help navigate that growth, mitigate risks, and serve as a sounding board for big decisions will be a significant asset to your success.
Reason 3: You are struggling to be profitable.
Sometimes, it is hard to step back and analyze why your business is not profitable. If you feel like you are just spinning your wheels, it is time to hire a virtual CFO. First, he or she will help you learn to really know your numbers. Once you understand what you need to do in order to grow your profits, you can more easily identify places to cut costs, optimize your cash flow, and improve the accuracy of your budgeting and forecasting to start running your business at a profit.
These are just a few of the many reasons why your business might work with a virtual CFO. If you have questions about the process of onboarding one of our CFOs or would like to speak to a member of our team, you can schedule a complimentary consultation. For an hour, you can discuss your unique business challenges and opportunities and get a better sense of the benefits of working with a virtual CFO.
We look forward to speaking with you.