What is Virtual CFO Services
CFO, The Chief Financial Officer, is responsible for managing the financial activities taking place within the business. They will be holding the topmost position in the organization. It is the responsibility of the CFO to track the cash flow and help in financial planning. Also, the CFO will play an important role in analyzing the company’s financial strengths and weaknesses and propose the perfect strategic directions.
But in the case of developing a startup, the business’s budget won’t support or give way to hiring a CFO for full time. To help those raising start-ups, the option for Virtual CFO helped a lot. Virtual CFO or CFO defines an individual or a business organisation that provides a CFO’s services.
The difference CFO provides their services as full-time workers, whereas virtual CFOs offer their services remotely, either through phone calls or video conferencing part-time. The major benefit of hiring a Virtual CFO is that one need not pay separately and hire a full-time CFO. Start-ups can get their services from the CFO until their business is fully developed and the need for a full-time CFO gets in.
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Activities to be done by Virtual CFO Services
The most important activity, the virtual CFO services performed is giving accurate advice and work plan based on the financial analysis, thereby giving hands in the organisation’s development. With this financial advice, the higher authority will execute their development plans without any budgetary issues.
Virtual CFO will conclude the break-even analysis, which tells us whether the company is running over profit or loss. With this break-even analysis, the company can make decisions on their expenses accordingly.
The virtual CFO will play a fundamental activity in forecasting the business’s cash flow. With these cash flow details, the business organisation will be able to take the right and needed decisions, thereby allocating funds for future planning.
Virtual CFO will give the cost management process a right, indicating the startup’s expenses. Also, the Virtual CFO plays an important role in deciding the working productivity.
Virtual CFO will provide better audit support in tackling the auditors.
Virtual CFO’s main activity is to make debt planning, thereby accomplishing the ideal objective and controlling the obligation.
Virtual CFO is responsible for giving timely and precise data in MIS reports.
Advantages of having Virtual CFO Services
- Maintains Accounts: A virtual CFO will guide the startups or the business to properly maintain accounts and records and create financial statements following the accounting standards per government norms.
- Budget Planning:As a virtual CFO, the person will help your business or startup grow higher, providing effective and reflective budget planning. With this, your company’s cash flow will be maintained properly for a successful business.
- Financial Investigation:A virtual CFO plays a prominent role in making decisions relating to the organization’s successful development. With the help of important operating indicators, the virtual CFO will analyze the business’s finance and operation.
- Increasing Probability:Providing you with a perfectly built strategy, a virtual CFO will save all the resources of your start-up or business from being wasted or lost. Thereby the vCFO will help you in increasing the productivity of the organization.
- Projecting the Cash Flow:The cash flow projection is very important in determining the business’s cash position. Knowing the cash flow, it will be easy for the organization to fulfill the cash requirements.
- Financial projections:Virtual CFO will help in financial projections, which are needed to ensure cash and assets.
- Track and Analyse Key Performance Indicators:Track and Analyse Key Performance Indicators: Key performance indicators like production, sales, cash, distribution, cash collections, and inventory levels will help greatly in understanding the position the startup holds in the current market and also the financial condition of the business. And as a virtual CFO, the individual or the organization will help your start-up track and analyze the KPIs regularly.
- Growth plan and Risk assessment:Dealing with the financials and the budgets of the startup, a Virtual CFO will help develop the business to the next level by proposing accurate development plans. Also, with the same knowledge, they pre-assess the risk factors and decide accordingly to decrease the danger occurrence.
Thus, with the virtual CFO’s help, it is very easy for the business and the start-up to manage all their financial issues and functions. Also, hiring a full-time CFO will cost higher, which seems to be a non-affordable thing for a startup. To solve that problem, CFO will help you. Also, vCFO will demand you less salary than a full-time CFO. With the help of the CFO, a business organization sees great development as a beginner. In India, there are many Virtual CFO Services in Gurgaon and Pune, who assist different business organizations to take the right organization. from various fields giving their company better growth and development.
Frequently Asked Questions
Any start-up or small business needs help from the virtual CFO to gain a sounding board, accurate financial dealings and calculations, pre-assessing the risk factors, and get wide-area visibility as vCFO deals with different clients from different clients different fields.
Within Virtual CFO, different services are included like bank relationships, weekly meetings, forecasting, company-wide KPIs, etc.
On average, the cost for hiring a full-time CFOs CFO may range between $175,000 and $480,000 per annum, whereas a virtual CFO offers services for a cost of $1500 per week, which is $80,000 per annum.
An accountant and a CFO are two different professionals, and they are never interchangeable. Accountant deals with tax management, whereas vCFO deals with long-term financial strategy. Accountants will maintain, audit, and inspect the financial records, whereas vCFO deals with crafting and building long-term financial strategies.