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5 Signs That Your Business Needs to Hire a Virtual CFO

With this ever-changing economic condition, one thing that’s going to remain constant is your consistent struggle to thrive and succeed in this competitive business world.

With this growth and expansion, you need an expert advisor who not just analyzes your business strengths and weaknesses, but also helps in strategizing & managing your business finances and finding ways to bring new business to your organization. 

Before that you might be having certain questions in mind on whether or not your organization is ready to onboard a virtual Chief financial officer to your team. Here are some surefire signs of when to hire a Virtual CFO for your team- 

5 Signs that your business needs to hire a virtual CFO- 

  1. Rapid Business Growth

Your business is growing more rapidly than you anticipated, and you’re planning for expansion.

Well, that sounds astonishing.

But it also means that from this very moment, you’ve to tackle all the responsibilities and never-ending workload and pressure on your own. Doesn’t this seem like a daunting task to you?

Therefore, in any such circumstance, you might feel the need of having a person solely dedicated to looking after the financial planning and management of your organization.

Simply, hire a Virtual CFO before you get to this point, who can head up the financial department.

Virtual CFO services are available at an affordable price to give your organization top-level expertise and oversee your business finances. They can support you in analyzing your industry trends, forecasting finances, and offering ways to scale up quickly through a financial lens. 

For instance- If you’re planning for mergers or acquisitions, there may be numerous questions that need to be answered before taking this massive step. Virtual CFOs with due diligence can lead you through this major business structure change by analyzing contracts, attending meetings as financial advisors, and helping you in avoiding wrong acquisition decisions.

Whilst you’re preparing for making add-ons in your firm, Virtual CFO will let you discover whether or not your organization is ready to hire more people in your team. They do so by evaluating the existing employee mix and if adding new people can build up the efficiency and profitability level of your organization.

From digging out the major risks and threats to identifying the capital and resources available to reach your goals or any policy development plans, Virtual CFO uses the best financial practices that aid in making a complex decision for your organization.

Come what may be your goals, all these complexities need financial expertise and a strategic roadmap to help your business grow and fulfill its long and short-term objectives, in lesser time duration and least possible money & resource allocation.  

  1. Struggling with Complex Financials

With growth, comes the messy, complex, and overwhelming finance detailing. Virtual CFOs with their financial expertise can help you in developing strategic plans, sorting obligations and additional financial insights, and acknowledging those tacky questions you will inevitably face.

Virtual CFO helps you with evaluation, planning, forecasting, reporting, and budgeting your business’s financial performance over time, whilst having a simultaneous look at potential risks and uncertain market conditions.

For all your long-and short-term goals, finances are what drive the business. CFOs monitor your expenses to make sure you’re able to control your costs within allocated budgets i.e. not overspending on unnecessary items and under-spending wherever required. The bigger your business gets, the more intricate questions are going to arise in the board of directors’ mind. Virtual CFO will help you with the preparations to answer them, by validating all the financial decisions made and evaluating the benefits and ill effects of the opportunities on the way.  

With such insights, a virtual CFO is ready to deliver essential financial advice to minimize your expenses and enhance your profitability on an as-needed basis.

  1. You need improved financial reporting

Once your business starts flourishing, it engages with different finances and reporting. You’ll find yourself juggling various bank account reconciliations, account payable receivable reports, and ledgers. 

In such circumstances, accurate and insightful reporting will become time-consuming. Therefore, it will become essential to hire a person who’ll be responsible for transforming your financial processes i.e. from inventory turnovers, pricing strategies, and vetting accounting software to analyzing reports.  

All these will make you consider adding a financial guide i.e., a Virtual CFO to your team who’ll provide you additional senior-level support, fill the knowledge gap, and support you in dividing the workload when you work with multiple entities.

The report provided by VCFO will include several aspects of your business including-

  • Analyzing & designing financial strategies
  • Evaluate and compile monthly & yearly expenses report
  • Revenue streams
  • Cash flow forecasting
  • Determining the appropriate time to scale up your business,
  • Identify key growth drivers and risk evaluations

All these reinforces your business plan as whole i.e. complete in-depth financial information becomes handy to you whenever required and will deliver a picture of your business’s financial health & performance.

  1. You need to focus on other aspects of your company

Working in the corporate sector always required multitasking skills. But once the work pressure increases, you might start screwing one thing for the other.

The same happens when things change & you begin to put your complete focus on finances and forget they’re pulling your attention away from the other aspects of business that might need more recognition. 

At this moment, you should consider outsourcing Virtual CFO services & assign them all the financial management-related tasks, strategy & projects of your organization. This will not only make the process flow smoothly, but also increases the efficiency and productivity level of your organization.

Virtual CFOs have the expertise and skills required to handle financial strategies, analyze projections, accounting, report generation, and mitigate and forecast risks.  

By having a Virtual CFO on your end, you don’t have to worry about spending all your time and efforts on financial regulations and responsibilities and you can shift your focus towards operation and business development. 

  1. Constant concerns about cash flow management

Aren’t your customers not paying their bills on time or are you giving them too much time to pay? Well, if such conditions exist then it indicates a lack of experience in handling day-to-day financial activities and multiple entities at the same time.

This may happen due to the sudden growth or expansion you’re seeing in your business, which might hamper your business performance.

So, this might seem to be the right time to hire a virtual CFO for your firm who can assist you with the modifications, acknowledgement of latest trends & patterns, cash flow management & forecasting beforehand to save you from uncertain conditions.

Upon investigating your business’s past performance and industry trends, the Virtual CFO will help you in developing a forecast financial plan and specify your business’s future needs. They will help you in managing your day-to-day financial operation and make sure it doesn’t obscure your business long-term goals.

Since raising capital is necessary for growth & expansion, a virtual CFO will address certain ways to establish the fair mix of loans & funding (equity and debt) and determine the best financing option for your organization.

Virtual CFO will look after the cash flow management of your organizations in certain ways-

  • Making sure your assets are being used effectively by determining the best investment strategies.
  • Supervise you with complex financial numbers.
  • Set up a strict policy to make sure payments are received and paid promptly.
  • Mitigate risks for internal control
  • Guide you with financing options on where more capital is needed for expansion.

Wrapping up

As a business owner, if any of the above signs sound relatable to your situations, then you surely need to consider adding a strategic financial partner i.e. a virtual CFO into your team. They help you navigate challenges & complexities you’re facing in your business financial operations, and you can pass around your attention in growing and thriving in everyday core business aspects.

A virtual CFO, who acts as a financial expert and advisor, is what your organization needs to attain sustainable economic success. 

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