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With the new startups turning up and mid & high-level established businesses planning for expansion, every company requires a head start to stay in front of the game.

Since hiring a full-time dedicated financial manager can be out of reach for some companies – Virtual CFOs are here to provide you with high-level financial advice, drive long-term business growth and stay combative in today’s market. 

Who is the Virtual CFO?

Well, who wouldn’t love to have an experienced individual or an entity by their side that guides them in developing & validating the growth of their company, but only at a fraction of the cost as compared to the traditional or in-house CFO? 

The Virtual Chief Financial Officer, therefore, is an outsourced service provider who takes care of top-level financial management, hence fulfilling all financial requirements of your organization from a distance. 

These may include business budgeting, cash management, statutory compliance, tax filing, financial analysis & reporting, and advising companies for strategic & informed decisions.

10 Ways to Enhance your business performance- 

Let’s understand how the Virtual CFO can maximize your business’s performance:

• Understanding market trends

Your organization’s success or failure rate is largely dependent on the knowledge of market opportunities and trends.

As a business owner, you can’t tackle everything on your own and at some stage, you need to bring someone who can assist in growth strategy and finance management.

A virtual CFO can assist you in understanding the trends, and needs of customers and identify potential risks. They reveal to you what’s happening in your industry; how your competitors are facing it and how you can improve your performance to stay ahead of the game.

They do so by preparing reports, data analysis, and insights and let you take advantage of emerging opportunities.  

• Gain Financial Expertise and Guidance

If you feel stressed about developing financial strategies for your company, then it’s high time for you to outsource a finance advisor. Virtual CFOs being the expert in their industry not only helps your company in gaining profitability & growth but also guides you in making the right decisions at the right moment.

Their expertise varies from-

• • Closely monitor & supervise the accounting team to manage the cash flow and forecasting.
  • Create budgeting, to make it easily accessible to acquire knowledge about your spending and saving capability.
  • Guidance on where & how to invest to reduce risk & increase returns.

• More Organizational Flexibility

Virtual CFO being highly flexible provides you an opportunity to engage in financial management services whenever required.  

You can hire them for a defined period (a few hours a week for short-term or long-term collaborations), all depending upon your requirements & challenges you are facing in your industry.  

Be it about gaining knowledge on what’s happening around in your field, assistance in special projects, during mergers or acquisitions, acquiring ideas about finance management & investments, or risk mitigation, you can take advantage of Virtual CFOs expertise & services. 

Such an initiative will help your business to adapt to the changes & be responsive to the environment by navigating your current business mission. 

• Better Compliance

If you are stuck with any legal aspects, you can get into big trouble if you don’t add an expert to your team to handle all the technical tasks & internal filing.

Financial compliance is essential, as it ensures that you don’t violate any laws or regulations, run into any legal trouble and lose customers & revenue.

Having expertise in the finance industry, virtual CFOs make sure that you grow, expand & comply with regulations, regardless of the industry you work in.  

A virtual CFO can help you in developing a compliance program and internal controls, and update existing financial systems to ensure compliance. 

• Improved Financial Decision-Making

Your business needs strong decision-making power at every stage of planning, regardless of the department you are working in. Since businesses that plan to run without a CFO might miss various business opportunities and exposures.

To assure that you make strategic business decisions that provide you profitability, a Virtual CFO has unbiased opinions that allow you to determine risks and opportunities and create a realistic plan to help you reach your objective.  

They help you discover new approaches how to make informed financial decisions with better problem-solving strategies that lead to increased profit margins and better cash flow management in your organization. 

• Optimizing business working capital

The way by which we look at a company’s account receivable, account payable & inventory is determined by the optimization of business capital.

Virtual CFO helps you in enhancing business capital by analyzing the company’s financial data and identifying ways to improve the potential cash flow management. 

They do so with the help of a key performance indicator that helps you in analyzing the working capital needs of your organization. So, the next time you plan to launch new services, scale your business or expand operations, you know where to find access to funding and how to spend money more wisely.

• Precise Financial Reporting

Whilst strategizing on expanding the business, you need more help on your financial team than just the bookkeeper or accountants.

It is essential to have flawless financial statements and tax compilation within deadlines to assure that your business undertakes precise financial reporting.

Thus, precise financial reporting ensures that you have full visibility into the metrics important for discovering financial health, making better financial decisions, distributing budgets, and creating and enhancing quality business processes.

• Building Relationships 

No single person can stand and run the business completely on their own. With time you need to develop & maintain the relationship with your customers, stakeholders, colleagues, clients, and bankers to nurture & grow your organization

Whilst assisting you in planning the financial management of your company, Virtual CFOs also provide you with unbiased guidance & necessary expertise in establishing good relationships with people around.

For instance, at some point when you are planning to expand your organization, you need to form healthy relations with investors as they can provide requisite funds to your business. 

Likewise, when you develop relationships with bankers and consultants, they can help you with raising loans & legal aspects of all the transactions or making capital expenditures.

• Forecasting and Mitigating Risk

With advancing technology, your business can become more exposed to threats. From natural disasters like fire & flood to employee theft, fraud, errors, or any kind of cyber-attack, many concerns can affect your business.

In such circumstances, you need someone who can safeguard your business and at the same time assist you in performing risk management. 

Virtual CFOs are experts in forecasting the risks beforehand and thereby can provide you with an effective plan to guide you in planning, estimating, and executing major financial decisions.

Based on past events, management insights, and quantitative data they have in hand, they can help in improving your organization’s ability to forecast future financial outcomes.

They will ensure that you are investing sensibly, have relevant insurance, and will make sure that all your sensitive data, equipment, and inventory are secured.

• Facilitating Changes 

“Change is the only constant”- This proverb constantly keeps reminding businesses that whenever they plan to expand, launch new services, create a financial model for capital raise, or collaborate with emerging organizations, it’s important to have someone who can measure and assess the short & long-term business performance. 

Keeping in mind which data can bring a positive impact on business, the Virtual CFO pulls out all the precise figures, interprets them, and gives informed guidance to simplify & drive business growth. 

If changes are carried out accordingly, the virtual CFO can help you analyze how far your business has grown on a cash flow and profit margin basis. In between the process, if they find any flux, they will help you identify the major factors and tackle them by taking prompt actions.

Bottom Line-

Virtual CFOs not only help in developing better financial management & impact revenue but also help in clearing a path towards growth while saving your business money.

In short, working in conjunction with the CEO, a VCFO can help your firm in developing comprehensive strategies & safely navigate to the next level by setting improved and more attainable margins.