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When Should a Business Consider a Virtual CFO?

Posted by: Ewen Fletcher on

Growing a business is incredibly challenging. It takes time, expertise, and good decision making across the board. One of the decisions management will need to make is when to hire a Chief Financial Officer (or CFO). Timing is key for businesses looking to grow and achieve their goals. So, when should a business consider a Virtual CFO? 

Key Indicators Your Business Needs a Virtual CFO

There are two key indicators for considering getting a virtual CFO: 

Your Business is Maturing

If your business has been running profitably for a quarter or longer, you may start entertaining growth and expansion plans. But growing your business requires total, hands-on attention from management. Strategic decisions need to be made, including devising marketing strategies, hiring, and technology planning. This can take up most of management’s time. 

A virtual CFO can take a lot off your plate while helping you map out strategies for growth as well as how to allocate financial resources to achieve these goals. Some of a virtual CFOs services include:

  1. Identifying profit opportunities, untapped markets, unprofitable product/service lines, and ways to reduce any debt.
  2. Helping identify unnecessary overhead and introducing processes that rationalise spending and purchases.
  3. Reviewing your cash flow to ensure that there is always sufficient cash for daily operations, and that excess cash is properly and intelligently invested.

You Require Managerial Assistance

Your management team will need to expand as you scale. Adding new products or services, for instance, requires additional product managers, as well as a team to work underneath them. Likewise, IT systems will need more technical oversight, which requires more expertise and a larger workforce. 

As you can see, growth stretches your business resources. Hiring a virtual CFO relieves your management team of some of the pressures of finance management and financial decision making, without actually requiring full-time presence. 

Why Do You Need Virtual CFO Services?

While very large companies have the financial resources to hire an in-house CFO, this doesn’t make sense for all businesses. However, having a CFO is important for growing businesses, since a CFO maximises the impact of your available financial resources, allowing you to better achieve growth goals. 

Virtual CFO services give you the benefits of an in-house CFO without having to hire one full-time. In fact, by relying on an outsourced CFO, you typically gain access to an entire team’s worth of expertise. As an independent outsider looking into your business, the virtual CFO also serves as an objective sounding board and advisor for financial strategies and decisions. Plus, you pay only when you use them. 

Finally, by relying on a virtual CFO for the financial aspects of your business, you free up your management team to take care of your core business operations. 

When Should a Growing Business Consider a Virtual CFO?

Consider a virtual CFO if any of these apply to you:

  1. You have your hands full dealing with operational concerns and you don’t have the time or expertise to maximise your available finances.
  2. Your finances are getting more complex. A virtual CFO handles the more complex aspects of expense control, debt management, and investments. 
  3. Third parties, like banks or investors, are asking you for more information about your finances.

Read more about outsourced CFO services here.

If you’re looking to create the business you’ve always imagined, consider our virtual CFO services. We offer scalable packages that grow with your business, so you get the expertise you need at a price point that works for you.

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