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Among many challenges faced by small businesses, managing finance and accurately forecasting growth can seem daunting. As COVID-19 struck small business owners where it hurts most - financial loss and uncertainty, hiring a full-time, in-office chief financial officer (CFO) can seem impossible.

Virtual CFO services can help you put your business together with intelligent insights but at a lower cost. If you are wondering how a virtual CFO (VCFO) can help your small business and if it's the right choice, you’ve come to the right place.

A chief financial officer evaluates financial strengths and weaknesses and proposes corrective steps that propel your business forward. The roles and responsibilities include managing and laying out the financial actions and regulating cash flow.

A CFO is also accountable for assessing the financial risks, cost, debt management and keeping records.

But there are times when small businesses cannot afford or understand how to afford this type of support. 

In this situation there might be the opportunity to work with a virtual CFO, enjoy all the benefits that in-house support would bring but at a lower cost. VCFOs handle all responsibilities that a traditional, full-time, in-house CFO does but do so remotely and are responsible for their own know-how and professional licensing. 

Hiring a virtual CFO will significantly reduce the financial burden and help organisations address the challenges efficiently, as s/he would provide both professional and financial advice and support.

Here are five reasons to consider if a virtual CFO would suit your business.

One of the major reasons why most start-up businesses fail in the first three years is financial immaturity. According to one study, up to 90% of start-up businesses failed in 2019 and business owners cited cash flow drying up as one of the primary causes. 

While this doesn’t always mean that decision makers need more financial management skills – it usually plays a very big part. Financial statements, tracking profit and loss, and budgeting play equally important roles when managing and optimising cash flow. As most small business owners are occupied with handling business and clients ignoring financial tasks, they end up hurting and limiting their business growth.

That’s where a virtual CFO comes into the picture. A virtual chief financial officer can identify financial discrepancies, provide budgeting and forecasting services and chart out the best solutions to the management for better and more strategic growth of the organisation. There job is to assess and locate the gaps and help the decision makers to understand how to solve them. 

According to an article on EY, most CFOs believe their present finance function doesn’t help them meet the demands of the future challenges and changes in the marketing landscape.

Upskilling the in-house CFO is costly and time-intensive and may not be the right choice for small business owners, especially now in post-COVID times.

On-demand and virtual CFOs are self-reliant and competent; they are equipped with the latest industry knowledge, tools, and technology. They are qualified and licensed to provide financial business know-how. (We recommend you check these things at engagement for your specific VCFO). So you get access to all that just when you need it without spending time or money.

Managing paperwork for tax and other financial compliance is one of the biggest challenges faced by small to medium-sized businesses. If it’s done wrong, it can cost your company a fortune and increase legal risks.

A VCFO will keep financial reporting well up to date so that auditing and taxation become easier. And s/he will also ensure accurate documentation to keep penalties and fines at bay.

At Talo Financial, we take all necessary steps to make your business more compliant helping you achieve a more correct business picture that ticks all the boxes. 

Small businesses succeed when they work hand-in-hand with virtual CFOs. They can help assess financial risks for investment and borrowing and suggest to you the right path that generates more profit.

VCFOs can recommend and suggest how the money that you’re planning to spend or borrow can be utilised and saved with proper budgeting and forecasting.

They can even validate or discourage business choices keeping the overall financial health and market trends in mind. Your VCFO should be well connected and have many recommendations to financial lenders and support should the business need it. 

Small or big, every business needs highly skilled CFOs who can operate competently across business financial areas:

• Transactional recording and bookkeeping
  
• Payroll
  
• Tracking and analysing cash flow
  
• Develop business strategies
  
• Financial planning
  
• Cloud accounting
  
• Other financial support
  

Finding the right person who can handle all the responsibilities is difficult and comes at a cost. And sometimes organisations need to hire more than one person for the job.