What is a virtual CFO and it’s Services?

The Virtual CFO is a new concept. It's a way for small businesses to get CFO support that they wouldn't have been able to afford previously.

Small businesses that hire a Virtual CFO get access to an experienced financial professional at a fraction of the cost of a full-time CFO. The services will differ from firm to firm, but usually a Virtual CFO will:

• Handle all the duties of a traditional CFO, but work remotely and on a part-time basis.

• Monitor the financial health and well-being of the business, usually with cloud technology.

• Offer financial insight and guidance on all company decisions and issues.

• Provide back-office functions such as managing accounts ledgers, depending on the client and their needs.

How the cloud can help you offer a virtual CFO service

If you want to offer valued-added services such as Virtual CFO, the first step is to start using cloud technology. The cloud offers several benefits that will help you set up a Virtual CFO service:

• Cloud solutions can share data, making it easy to synchronise and transfer data between different systems.

• Cloud accounting software gives you real-time reporting and analytics features. These help you gain insight into a client’s financial condition.

• Cloud accounting and business management solutions are accessible anytime, anywhere. This means you can offer Virtual CFO services to your clients from any location.

The bank account reconciliation is one example of how the cloud can save you time and money. Traditional reconciliation is tedious and time-consuming. Cloud accounting software can do it much faster, connecting to online bank and credit card accounts that are also in the cloud. Daily bank transactions are fed into the accounting software and matched to the corresponding transaction. Then all the user has to do is confirm the match.

This shows how cloud accounting can automate a low-value task, leaving you with more time to work on more profitable business.

Do your research carefully when deciding which cloud accounting software is best for you. Read our guide to moving your accounting practice to the cloud to help you make the right choice.

Advantages for small businesses

Having access to a Virtual CFO can be a big benefit for a small business. Most of them can't afford an experienced, knowledgeable CFO on a full-time basis and may never consider hiring one.

That's a problem, because many small businesses fail within the first three years. Reasons include failure to set themselves apart from the competition, and an inability to find a profitable business model. With an accounting professional acting as their Virtual CFO, they could keep their financial goals and realities clearly in sight.

A Virtual CFO is an affordable alternative to hiring a full-time CFO and can make a big difference to a small business, by:

• Creating budgets and forecasts.

• Pinpointing problem spending by highlighting trends in the market.

• Validating or discouraging business decisions with financial well-being in mind.

These are abilities that the vast majority of business owners don't possess – but they often need them in order to succeed.

With a combination of practice knowledge, cloud-based accounting software, mobile technology and modern data analytics, you can provide Virtual CFO services that will be of great benefit to your clients.