Every business can benefit from a CFO.
This statement holds true for startups, small businesses, large corporations, and nonprofit organizations alike.
The problem is that it can sometimes be challenging to find a CFO that fits in well with a smaller company. You might not necessarily have the workload to hire someone that will be busy for 40+ hours per week.
Plus, an experienced CFO may not be willing to work part-time with a smaller business.
That’s why virtual CFO services are growing in popularity. It’s a great alternative solution for any business that wants an outsourced CFO, without the need for an on-site presence.
If your growing business needs the financial guidance and expertise of an executive role in your company, a virtual CFO might be exactly what you’re looking for.
For those of you who aren’t familiar with how a virtual CFO works, I’ll explain the top benefits of this option as opposed to hiring an in-house or full-time CFO.
1. Cost Effective
A virtual CFO will be less expensive than hiring a full-time CFO to work in-house at your company.
An experienced CFO will demand a high salary, and rightfully so. Plus, if you add in vacation time, benefits, and payroll expenses, the position could easily cost you more than $250,000 per year.
Smaller businesses and startups usually don’t have that type of money just laying around.
But a virtual CFO or outsourced CFO service will only bill you based on the time and deliverables needed by your business. Depending on your needs, this could only be a few hours per week.
You won’t have to add a virtual CFO to your payroll, give them benefits, or worry about any of the other costs associated with hiring a new employee either.
2. Experience
All CFOs have financial experience. That goes without saying.
However, a traditional in-house CFO will have likely spent most of their career working with just one or two companies. This means that their overall experience is somewhat limited.
But a virtual CFO will be much more well-versed.
They will have experience working with multiple businesses across varying industries. So, there is a better chance of an outsourced CFO knowing how to meet your company’s needs since they’ve essentially seen it all before.
This will add so much value to your business.
You’ll be getting additional insight and analysis from the perspective of an executive role, that you normally wouldn’t get with a traditional full-time employee.
3. Flexibility
So many virtual CFOs are part of a larger outsourced CFO service.
It’s common for a virtual CFO service to give you one contact person in their organization. But with that said, this person will likely be working behind the scenes with other people to meet the needs of your business.
This means that the expertise is enhanced even more since you’ll potentially have two, three, or even more CFOs working with your company.
An in-house CFO won’t have those resources at their disposal.
Plus, if a full-time employee gets sick, quits, or goes on vacation, you’re left with nobody to replace them. With a virtual CFO, the service continues, regardless of what happens with just one member of the virtual team. Any transition will go smoothly and won’t disrupt your process.
4. Accurate Financial Reporting
Even if you have a bookkeeper or a controller, you might not have standardized formatting and reporting for all your financial documents.
This can become a problem when it comes time to prepare certain financials, make forecasts, and get ready for tax season.
Any experienced virtual CFO service will use GAAP. They’ll also guide your bookkeeping department in a way to standardize everything across the board.
Taking this approach will ultimately keep your records organized and improve the accuracy of your financial reporting.
5. Adaptability
Outsourced CFOs and virtual CFO services have worked with dozens of different businesses.
This means that they’ve seen and managed a wide range of personality types. A virtual CFO will be an expert in adapting to meet the needs of your team. They’ll fit in right away, without a long gap of the “get to know you” stage.
They know how to fit in with a financial team in an executive role without infringing on or damaging any egos in the company. So, there won’t be any problems or steps backward when it comes to management or delegating tasks.
Furthermore, a virtual CFO can meet nearly any challenge thrown at them. They’ve been in this position before, and they won’t be intimidated by an obstacle.
It’s unlikely that your business type, industry, and stage of growth is something that they haven’t seen before. Even if you present them with something new, CFOs have exceptional problem-solving abilities.
6. Credibility
Virtual CFOs that have been around for a while have a proven track record. This means that they’ve raised funds and solved problems for other businesses in the past.
You won’t have to worry about hiring someone who feels the need to prove themselves and plans to experiment with your business.
An experienced virtual CFO will use proven methods and approaches to improve your company. They’ll also have a rich network of other individuals who can potentially help your business grow. I’m referring to people like lenders, VCs, and other experts within your industry.
Your virtual CFO can call on these contacts if you’re in need, and they’ll get a response based on their credibility.
If you want to expand, sell, or make another big move for your business, a CFO can guide you and connect you with the right people to meet your needs.
7. Shorter Learning Curve
Any time you hire a new employee, you can’t expect them to get up to speed on day one.
Depending on their role in the company, it can take weeks, or even months to train them. By the time this person can perform at maximum capacity, 6, 12, or even 18 months might have passed. That’s not very efficient.
While a virtual CFO may not be operating at full capacity on day one, the learning curve will be lowered significantly.
They have plenty of experience with onboarding at new companies, so they know how to get into a groove and maximize their efficiency as fast as possible.
A virtual CFO can assess the current state of your company and proceed accordingly without wasting any time.
Conclusion
If your company needs a CFO but you’re not ready or able to bring on a full-time employee, hiring a part-time CFO is a perfect solution.
Virtual CFOs can help your business grow, regardless of your industry or how long you’ve been in business.
Now that you understand the top benefits of a virtual CFO, request a consultation with Navitance to let us know more about the needs of your business.
