The role of the finance professional continues to develop and grow.
As cloud computing continues to improve, it has opened up the opportunities for accountants and finance professionals to move away from providing compliance only services, to more forward looking and strategic services.
This role doesn’t suit everyone, but for those accountants with commercial acumen and a desire to provide valuable and meaningful work, vCFO advisory can be a rewarding field to explore.
vCFO, Fractional CFO, Part-Time CFO, in essence, are all the same thing.
What we are talking about is accountants or finance professionals providing part-time CFO services to your business.
Isn’t that what my accountant does?
Sometimes yes, your accountant may provide ongoing support.
But the vCFO role is more involved, ongoing, and there are more touch points throughout the year.
Whereas your typical tax accountant may provide annual tax return preparation, financial reports and tax planning, a vCFO is more likely to provide:
• Strategic planning to help you grow your profit
• Cash flow management
• Budgeting assistance
• Benchmarking, dashboard and board reporting
• Performance improvement strategies
As part of this, they will more likely be involved in the day-to-day operations, overseeing your monthly close offs, payroll, and liaising with external bodies for audits, tenders or other high-level finance functions.
More regular touch points means the vCFO is more up to date with your business, allowing them to contribute more strategically in helping you and your business achieve its goals.
I have personally been involved in this capacity for a number of years and have found it to be the most effective form of advisory, as you become one of the team.
The more frequent touch points allows you to have a deeper understanding of the business, of the owner’s goals, allowing you to more frequently identify opportunities to help them achieve their goals.
If you aren’t already convinced, here are 5 reasons my vCFO service may be exactly what you are looking for.
1. Access to a finance professional at a fraction of the cost
The CFO is the Chief Financial Officer for large businesses, responsible for the entire finance function. Given the level of responsibility, CFO can command massive salaries, often stating from $200,000 per year to millions per year.
This level of commitment is just not affordable for most SMEs, nor is it required. However, SMEs can still benefit from the experience a CFO can bring to their business.
The vCFO allows SMEs to access expert advice, at a fraction of the cost. As you pay on a needs basis, you can tailor the services required to suit your business.
Oftentimes the work a vCFO is required to provide may be higher at the beginning of the engagement, to bring your business up to speed, and taper off towards a more ongoing monitoring service afterwards. This is not possible with a full-time employee but can work a treat with a vCFO.
2. Fill the knowledge gap
Bookkeepers perform a valuable role for the business, effectively creating the foundation of your financial reporting.
The role of the vCFO is not to take over these services, but to use this information to provide financial insight into your business. The vCFO role augments your existing finance team, it does not replace them.
By working with your existing team, this makes the process more cost effective, as the vCFO is able to provide high level insights when needed, rather than being involved in the day-to-day bookkeeping and processing requirements.
I hate to say it, but oftentimes there is a large gap between what a bookkeeper can provide, and what an experienced finance professional can do for your business. Utilising a vCFO allows you to fill this gap.
3. Mentor your finance team
Being an internal accountant is a tough gig.
Most accountants in this role feel lonely. They are working in a role their boss doesn’t understand, doing a job most people don’t appreciate. This leads to issues such as inadequately recruiting for the role, difficulty in keeping staff engaged, and difficulty knowing if the quality is there. In worse case scenarios, the role is seen only as a compliance task, not the value adding role it can be.
Working with a vCFO gives your finance team the opportunity to ask questions, to learn from an experienced professional. This in turn empowers them to grow their role, grow as individuals, and ideally, look for opportunities to improve your business too.
4: Accountability
Most business owners know they should regularly be monitoring their Gross Profit Margins, checking if they are achieving their goals, but when is the last time you were able to find the time to take a step back and go through your products or service offerings in detail?
Most business owners know what they should be doing, but fail to find the time.
Having a trusted business professional available to review these details with you or on your behalf, provides seriously valuable information to help you grow your business.
There’s no shortage of stories where a business owner thought they were making money on a product line, only to realise they were losing money with each sale. Or the story about a ‘loss leader’ product line that was utilised to bring in new customers. Only the new customers weren’t coming.
A thorough analysis of your business can help measure the success of your business initiatives. In the later example, the owner simply stopped offering the ‘loss leader’ product and simply made more money as a result.
5. Help your business grow more strategically
Lucky last. I feel this is the most important way a vCFO can help you.
Everyone wants to grow their business. The vCFO has experience in helping you improve your business, to manage cash flow better, to save costs, increase margins.
Having seen other businesses succeed and fail, the vCFO can use their experience to guide you in the right direction. A second opinion never hurts, especially when it comes to finance, which is so complex and misunderstood.
Over my career I’ve helped business owners:
• Improve their cash flow
• Buy, sell, start and grow their businesses
• Complete due diligences for potential purchases
• Bring in new partners
• Hire, fire and performance manage staff
• Complete dashboard, board and ongoing management reporting
• Improve their financial reporting framework
• Mentored business owners to increase their financial knowledge
• Structure their affairs to make the most of legal tax savings
• And most importantly, been a voice at the other end of the phone when they need to speak to someone.
I’d love to help you do the same.
If you are interested, please contact me for an obligation free discussion discussion about the ways we can help your business.