what does a virtual cfo do?

What Does a Virtual CFO Do?

Thinking about your business finances and unsure what steps to take to maximize your profitability, scale successfully, or increase efficiency? A virtual CFO can help you tackle all of those problems by providing forward-looking financial and operational insight into your finances. 

But, to be honest, most of how most people talk about what an outsourced CFO does is pretty vague. As a virtual CFO myself, I sometimes find it hard to explain what I do to help clients and put it into perspective, especially when most people think of the role of a CFO in a major corporation or large enterprise business.

In big business, the primary job of a CFO is to measure and optimize the financial performance of a business and oversee the financial management of a company. They’re on the same level as other C-suite executives, like the CEO, COO, CIO, and others. CFOs typically focus on reporting, liquidity, and return on investment for a business and keeping financials in line with the overall goals and vision of the company.

But when you translate that to a fractional CFO or outsourced relationship for a small business, what does that actually look like? What does a virtual CFO do for small businesses?

I want to clear up a bit about what a virtual CFO actually does and what you can expect when working with a financial advisor for your small business. 

What Does a Virtual CFO Do in a Small Business?

Most small business owners start off taking on the role of the CFO on their own, as well as being the bookkeeper and accountant for their business. Eventually, you’ve probably discovered that you needed help and brought in someone to manage your books and do your taxes at the end of the year. 

But when it comes to actually understanding the financial performance of your company, how to optimize your profitability, when to take on debt, and how to reduce financial risks, you probably still feel lost. That’s where a CFO can help your business.

But hiring a full-time CFO can be costly and unnecessary, depending on the type and size of business you own. Most small businesses only need a part-time CFO consultant to help them with financial management and can save as much as 70-80% with the lower costs of working with a virtual CFO

That’s where fractional CFOs like me come in. A virtual CFO is the middle ground between hiring a full time CFO and taking on the responsibility of financial planning for your business yourself. 

A virtual CFO is not a replacement for a bookkeeper or accountant but instead works with those people on your team to help you tackle the big financial questions about your business and make a plan of how to get where you want your company to go.

I help your company oversee day-to-day financial management as well as help you make sense of your company’s financial standing and future. A lot of what I do centers on helping your business develop strategies and take actions to improve, both financially and operationally.  

What Do Virtual CFO Services Offer?

The biggest benefit of a virtual CFO is they help you understand your financial data and use it in ways to help grow your business. Essentially, it’s all about making your money work for you and increase lean efficiencies. The kinds of services virtual CFOs offer range quite a lot so asking questions about what you can expect when working with a digital CFO is important to get what your business needs.

Generally, CFO consulting services can include: 

  • Bookkeeping
  • Interpret metrics and data
  • Set up systems and automations
  • Strategic planning
  • Interpret results
  • Monitor cash flow and financial statements
  • Cash management and planning
  • Financial strategy development

Not all virtual CFOs offer bookkeeping services and may help you find a reliable, cost effective bookkeeper to work with. Additionally, some digital CFOs also offer services beyond the traditional scope of a CFO, like operations and human resources strategy.

A Better Approach to Virtual CFO Services

Working with a virtual CFO to help your small business succeed can go well beyond just financial advice and also tackle key issues where finances and operations intersect. Because, let’s be honest, your entire business operations affect how profitable your company is and looking at financials is only half the picture.

The goal I always have with every client is to help you understand data so you can make informed decisions to achieve your business goals. But that requires more than just spreadsheets and financial dashboards.

My virtual CFO services center on the traditional aspects of financial strategy and management but also incorporate operations, systems, HR, and processes that all affect the financial success of your company.

I start off with a review of your business operations and finances to help you identify what needs to be changed to help your business not only run more smoothly but also be more profitable. My Action Plan addresses issues related to:

  • Finance & Cash Flow Health 
  • Software Blueprint & Systems
  • Operations & Teams 
  • Limitations & Opportunities

After digging into your overall business productivity and profitability, we create a plan for you to follow to improve operations and financial health and routine check-ins with advisory services to help you continue towards your goals.

What Can a Virtual CFO Do for You?

If you’re feeling overwhelmed or lost when it comes to financial planning and decisions in your business or maybe you feel like you’ve hit capacity when it comes to growth, then working with a fractional CFO might be right for you. The best way to find out is to talk to an experienced virtual CFO and talk through the challenges your company is facing. 

As a virtual CFO, I have years of experience helping businesses of all sizes with their finances and reach their goals unique to their business. It’s all about creating stability, predictability, and solving problems to make your company become the success you’re dreaming about. 

I offer a Good Fit call to talk through your goals and how I can help you. Schedule your Good Fit call today to learn more about what my virtual CFO services can do for your business. 

Continue Reading