What Is A Virtual CFO And Does My Business Need One?

Virtual CFOs on a computer screen

Your Washington D.C.-based business is growing. Customers are buying what you’re selling. You should be ecstatic, but you can’t sleep at night. You feel like the business is out of control.

Things should be rosy, but instead, it feels strained. You’re confused by the reports you have. You’re worried the tax return is wrong. You’re in over your head talking to lenders. You’re not even sure you can make payroll, and you don’t know why.

Sound familiar? Maybe it’s time to hire a virtual CFO.

Sure, your business might be too small for a full-time, in-house CFO. But that doesn’t mean you have to go without. If finances weren’t hard when you started the business, but now it’s a lot more complicated, that is often a surefire sign that you need a virtual CFO. An outsourced virtual CFO can help you connect the dots, make sense of your current situation, and help you plan for the future.

The Role of a Virtual CFO

A virtual CFO considers the business as a whole, focusing on growth and profitability rather than the individual financial transactions. They must have good accounting skills, but they also need strong project management skills to lead and facilitate the movement of projects and tasks within an organization. They must have the right combination of soft and hard skills to look at the broader picture and chart a course for the company.

A reliable CFO will be future-focused and anticipatory. They may rely on historical data to make informed decisions. Still, they must also be aware of changing technologies in the marketplace, the economy, the organization’s marketing, and management environment, organization, culture, customer concentration, vendor financial health, and many other external elements that affect the organization.

Sometimes, an organization needs a combination of accounting professionals. For example, CFOs often work in tandem with bookkeepers, accountants, or CPAs to ensure that they have accurate financial information. We recommend you check out our blog post on the topic if you’re curious about the differences between bookkeepers, CPAs, and CFOs.

Should I Hire a Virtual CFO for My Business?

A CFO takes their financial expertise and channels it into a strategic leadership role to create financial success for your company. CFOs understand your business model and your banking relationships, prepare detailed financial and management reports, work with auditors, oversee tax planning, and set policies around controls and payroll.

CFO responsibilities include budgeting and forecasting, managing outside funding or acquisitions, and compliance issues. The CFO is forward-thinking as they consider economic, industry, tax, government regulation, and social issues.

How can you be sure your business is ready for this kind of financial leadership? You know you need a virtual CFO when at least three of the following are true:

  • You need to know why profitability is not at the desired levels.
  • Your business requires complex tax planning beyond your bandwidth or your expertise.
  • You want a financial model that represents your business strategy.
  • You require visibility into future cash flows.
  • You need to better understand your margins.
  • You plan to develop new products, markets, or offerings.
  • You require detailed financial data in order to make sound business decisions.
  • You would benefit from having a business partner in order to develop and execute strategy, providing leadership and oversight.

So would your business benefit from the help of an outsourced, virtual CFO? Contact KBS CFO, and we’ll help you get started.