Advantages Of Virtual CFO Activities: Why Is It Becoming An Increasing Trend?
The CFO is a significant player within the organizational sphere. He spearheads critical financial decisions that may affect the well-being of a business concern. These decisions range from bookkeeping, financial compliance to financial planning. However, in recent times the role of a CFO has expanded out of the financial sphere into operational decision making and strategy. Also, recent developments in the financial ecosystem have created a new generation of CFOs- the virtual CFO. Like the traditional CFO, a Virtual CFO handles all the responsibilities of a conventional CFO but does that remotely. Smaller start-ups, business owners who lack the skillset to handle core financial activities have often found comfort in Virtual CFOs. Here are some reasons why businesses now resort to virtual CFOs.
1. Process
Developing processes that will match the long-term growth plans of an organization is one of the activities virtual CFOs perform. The idea is that as a business expands, newer changes that often directs towards ever-complex financial activities might begin to surface. In these instances, a virtual CFO creates processes that can easily accommodate the new wave of activities and ensure scalability. The process covers various increasing channels of spending between clients, vendors, employees, and the business.
2. Flexibility
One of the benefits of hiring a virtual CFO is their flexibility to adapt to a business environment. Unlike their traditional counterparts, virtual CFOs are not constrained by the regular 9-5. In most cases, they let business owners decide the number of days, or weeks they can work, whether part-time or full-time. Moreover, you can pay on a more flexible basis while still enjoying the expertise they bring to the table.
3. Cash flow management
Virtual CFOs have shown impeccable expertise in cash flow management. They observe business finances objectively and are keen on making accurate cash flow decisions to grow the business. With their skill set, they can easily match expenses with revenue, mitigate unnecessary expenditure, create more accessible payment options, and trace sources of organizational cash flow.
4. Introduce Potential Clients to the business
One of the major strengths of a virtual CFO is their ability to create a viable ecosystem of business owners, potential investors, professionals, and other stakeholders. Also, they can foster positive interactions among these individuals that can lead to potential investments. Furthermore, their accurate reporting and analysis of organizational financials will give potential investors more impetus to partner with a business.
5. Budget
Budgetary control is an aspect of a business concern that professionals should handle. Therefore, virtual CFOs have the right skillsets to control an organization’s budget. They possess strategic and analytic skills and will always give detailed and objective reports on their findings. Furthermore, they adopt proper techniques to ensure that every expense and revenue item in the budget is matched and correctly accounted for.
