Growing Your Business

5 Reasons Why You Need a Virtual CFO

by
Julie Farless
on
2/13/2019
5 Reasons Why You Need a Virtual CFO

If you’re like most small business owners, you wear many hats while attempting to make your business as successful as possible. For example, you may be responsible for managing inventory, communicating with clients, dealing with complaints, and handling all the financial aspects of your business.

In many cases, business owners take on all of these responsibilities simply because they don’t believe they have the ability to bring in experts to help them with any of these important tasks. Unfortunately, all this multi-tasking can cause problems for your business, especially when it comes to your finances.

In fact, as many as two-thirds of businesses do not make it past ten years, often because they were unable to set themselves apart from the competition and/or find a profitable long-term business model. 

Having a CFO on staff can be a big benefit for a small business, but dedicated CFOs are expensive. Luckily, even if you can’t afford to hire an experienced, knowledgeable CFO on a full-time basis, you may still be able to get many of the benefits of having a CFO with only a fraction of the cost by investing in a virtual CFO.

Some of the benefits of hiring a virtual CFO include:

1. Access to CFO-level insight at a non-full-time rate.

Hiring a full-time CFO may be out of the question for your business at this time, but you can still enjoy the benefits of having a CFO on staff by hiring a part-time CFO. With a part-time CFO, you will pay only for the services you use, as opposed to covering a full-time employee’s salary and benefits. 

2. The ability to ensure the profitability of the business by making strategic decisions.

With a trained accounting professional explaining the details of your business’s financial situation, you will be better informed about your current status and your options for moving forward. This will allow you to make more effective strategic decisions every step of the way, thus ensuring that your business will be as profitable as possible in the future.

3. Assistance with the management of business risk.

All businesses face risks. A trained, experienced part-time CFO provides you with a neutral, independent analysis of your business’s situation that you can use to make decisions that minimize your company’s risks and maximize profitability.

For example, if you are planning to invest capital, your CFO can act as a sounding board, helping you make the best investment choices. If you are concerned about employee theft, your CFO can help you develop stronger financial controls to reduce this risk as well. CFOs can also provide advice to business owners considering new product lines, services and/or debts. 

4. Help with fundraising.

When you need more capital to fund a certain business venture, your virtual CFO can help you generate it. Depending on the situation, your CFO may point out ways that you could raise the money you need, or he or she may show you areas of the budget that could be modified to save your company money. 

5. Customizable services.

When you hire a full-time CFO, he or she is your employee for better or worse. Even if you don’t have much work for the individual to do during a given week, you must still pay him or her the same wages and continue to provide any benefits you have promised.

With a part-time CFO, however, you can pick and choose which services your CFO provides. If you don’t have as much work for your CFO, you can scale back the individual’s involvement in your company until your need for services increases again. 

As a small business, you may feel as if you have a few options that are both affordable and effective. However, virtual CFOs are the exception to this rule. With an accounting professional acting as your outsourced CFO, you can keep your financial goals and realities clearly in sight without paying a full-time CFO salary.

Although you will still pay a small fee for this individual’s services, the benefits of having access to a trained virtual accounting professional will be well worth this minimal expense.

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Julie Farless

Julie Farless

Martinez & Shanken, PLLC is a Certified Public Accountant (CPA) firm based in Gilbert, Arizona. We provide a full range of accounting, bookkeeping, consulting, outsourcing and business services, but we specialize in tax preparation. We work with you to ensure that your personal or business processes are conducted in a manner that ensures ongoing integrity in your financial transactions. We are available to answer your questions and help with your ongoing tax planning and changing business needs.

Deborah Martinez & Earl Shanken
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Arizona

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