According to the US Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years and another 45% during the first five years. Hence, it is important for businesses to have a finance leader who will protect the interest of the shareholders and ensure adequate financial management, at the same time drive growth and profitability.

However, it might not be possible to hire a CFO or Finance Head in the first few years of operations due to cost and difficulty to attract the right person. Hence, hiring a virtual CFO would be an ideal solution.

A virtual CFO can provide numerous benefits to a business, regardless of its size or industry. A virtual CFO can help companies optimize their financial operations, reduce costs, and support growth, all while providing valuable guidance and expertise.

Some of the benefits of hiring a virtual CFO are as follows:

Improved Financial Management

A virtual CFO can bring financial expertise and experience to your business, helping you make informed decisions, create and implement effective financial strategies, and manage your finances more efficiently.

Virtual CFOs can help with financial analysis and liquidity maximization. They can also offer tax planning that can help optimize your profit. With the help of a virtual CFO, you can make a more comprehensive financial decision for your business.

Diverse Experience and Expertise

Virtual CFOs would have worked or multiple companies of all sizes and different industries. As a result, they likely encountered and solved problems of different scales and situations than in-house CFOs. Thus, you can be sure that they have in-depth expertise in managing the financial matters of your business.

They would also have a wider expertise and skill set than an in-house CFO since they must have handled all areas of finance and business operations. Many would have been involved in creating strategies, fund raising, acquisitions and integrations, etc which are rare and highly value-adding expertise.

Reduced Costs

Engaging a virtual CFO would normally cost much lesser than hiring a full-time CFO, while still providing you with access to high-quality financial expertise.

Virtual CFOs don’t require social or medical benefits, bonuses and stock options. They would normally work remotely and in their own space. Thus, you won’t need to rent a large office space for them as you would with an in-house CFO.

Flexibility and Scalability

A virtual CFO provides you with the flexibility to access financial expertise as and when you need it, without the commitment of a full-time employee. With a virtual CFO, you can access the level of support you need, when you need it, making it easier for businesses to scale their operations as they grow.

Access to Their Vast Network

You can expect a virtual CFO to have a wide array of contact as a result of working with different companies and people. Such contact may include a network of previous investors, clients, service providers and employees. This means a wide range of resources that you can leverage for your business to grow, access new markets, upscale your business, tap top talent, or engage new vendors.

Faster Integration

Virtual CFOs constantly enter and exit teams of varying size and businesses and would have worked with people of different personalities. This allows them to develop skills necessary for easy integration and enable better teamwork. This means that they can quickly assess and cope with a new working environment.

Aside from speedy integration, a virtual CFO also has a shorter learning curve. Thus, they can give you needed results faster than most in-house CFO can.

Improved Focus

By outsourcing financial tasks to a virtual CFO, you and your team can focus on core business activities, allowing you to be more productive and effective. And as your business grows, you can even have the CFO manage operations and many other back-end activities, giving you time to focus on growth and clients.

Access to Latest Technology

Virtual CFOs are often able to bring the latest financial technology and tools to their clients, making it easier for businesses to streamline financial operations and reduce manual processes. They would have been exposed to different levels of automation and can bring in best practices.

Compliance

A virtual CFO can ensure that your business is in compliance with applicable financial regulations and laws, protecting your business and avoiding any penalties or fines. They help you develop and implement policies and procedures to ensure compliance and can create a compliance program that is tailored to your business needs and risk profile. A virtual CFO will also train and educate employees on compliance requirements and best practices, which will ensure that everyone in your organization understands their role in maintaining compliance.

Best Practices

Virtual CFOs can bring the widely accepted and standardized practices of financial and even non-financial operations, which can lead to increase in productivity and efficiency. He can also help adopt industry best practices and competitor practices, which an in-house CFO may not have visibility of.

Conclusion

In conclusion, whether you’re looking to upscale your business or not, hiring a virtual CFO will benefit you. Aside from being cost-effective, virtual CFOs can also bring value to your company with their diverse experience and wide skill set. A virtual CFO can provide businesses with wide financial expertise, insight, and support they need to succeed and grow, without the cost, commitment, and complexity of hiring an in-house finance leader.

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