Small to medium sized business owners and managers often have numerous questions about their organisation’s financial performance and on frequently they, or their staff, just don’t have the skills or knowledge to provide the answers. Analysing profitability, recruitment affordability, business efficiency and risk management are all areas that attract questions from business owners and managers and need answering.
The difficulty comes for small to medium sized companies (SMBs) who simply can’t afford or justify recruiting a senior level Finance executive with enough experience and expertise to bring the desired level of benefit to the business. It is unarguable that a Chief Financial Officer (CFO) will bring significant benefits to a small to medium sized business (SMB), but they are probably not required all the time and they are more than likely an unaffordable financial cost for the business.
For business owners and senior managers who want the answers to their financial questions, who seek guidance and counsel on financial matters and who want to make sure they are compliant with the plethora of financial legislation that exists in Australia, there is a solution, and that solution is a virtual CFO or CFO services.
Outsourcing CFO services will give companies all the benefits of having a highly skilled and experienced Chief Financial Officer (CFO) on their team, but at a much-reduced cost, as companies only pay for the time they use and don’t have the overheads and benefit costs that a senior financial manager would command.
What are the benefits of a CFO Service?
A virtual CFO will be responsible for a businesses’ financial systems and financial management. They will bring financial expertise and experience that most business owners and management teams just don’t have. By using a virtual CFO, a business can gain the following benefits.
Financial Information
A virtual CFO will examine, analyse, interpret an organisation’s financial information, its performance, and trends, and make recommendations and take action to establish systems and procedures that will ensure the optimal performance of the business.
Financial recommendations and action
The virtual CFO will see problems and upcoming issues and advise on avoidance and prevention of financial difficulties. They will also create financial systems and processes, based on plans, budgets and forecasts and will help build a strategy for the business, to ensure continued growth and profitability. The virtual CFO will also measure the business performance against the forecasts and budgets and look for any issues that might stand in the way of the business achieving its objectives.
Cash and Capital
The CFO Service will focus on cash flow and setting up systems that ensure that cash is managed effectively by the business, whatever the circumstances. They will also ensure that the business always has sufficient funds for continued trading, without the need for unplanned borrowing. A CFO service can also work on capital raising if needed and communicate with banks, investors, and other financial stakeholders when necessary.
Risk Management
The CFO Service will analyse all the risk that the business faces and ensure that there is adequate insurance in place for fire, theft, or natural disaster. They will also be involved with the organisation’s data storage and protection, as well as cyber security. The CFO Service will also more that likely work on protective measures against internal crime and negative actions by staff, as well as premises and property commitments and exposures. A CFO Service will analyse all risks that the business is exposed to and help draw up a full plan to minimise that risk. As well as physical and technological risk, the Virtual CFO will also ensure that the risk of non-compliance is minimised.
The final area where a CFO Service or Virtual CFO can help a business is by becoming a strategic adviser to the company and that often involves a member of the CFO Service sitting on the company board and working with the business owner or management team on the organisation’s financials and often their overall strategy and advising on all issues of the company’s finances and related areas.
Outsourcing to a CFO firm allows a business to benefit from all the skills and expertise of an employed CFO as well as all the services of an accountancy practice, but only for the amount of time a business needs it.
