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How a Virtual CFO Can Help Your Business Right Now

By | Hannah Boothe

Many small businesses are struggling to keep going in the age of COVID-19, but there are things you can do that will help a lot. A virtual chief financial officer is one such step to take to keep your business on track.

What is a Virtual Chief Financial Officer (VCFO)?

A virtual CFO is a financial expert who provides strategies for the financial well-being of a company for specific projects or on a part-time basis. He or she has exceptional experience in the growth of public and private companies. Without employing a full-time chief financial officer, your business can have high-level financial strategies, systems, and designs to optimize operations. Other areas in your business he can help are:

  • Cash flow challenges
  • Tight margins challenges
  • Raising capital challenges
  • Office efficiency challenges
  • Growth challenges

Today’s Challenges Are Different

While all of the above is important, these days your business does not have efficient office systems. You may need expertise in making strategic cost cuts as well as cash flow. A virtual chief financial officer will give a new, well-informed perspective on your business to find solutions that you or your employees may not see.

Raising debt or equity capital may be essential in these difficult times to keep your business afloat. A VCFO has the expertise to provide strategy, due diligence, and extensive expertise to negotiate terms for a loan. He will understand the ratio of debt and equity financing that is best for your company.

Employing a VCFO is your chance to have your current costs and price structures analyzed by an expert. She will determine any improvements that you can make and help you incorporate those improvements into your business practices.

Even if You Have an In-House Chief Financial Officer

Your in-house employee may run your business very well, but when it comes to certain challenges listed above, she may not have the experience needed to take you to the next level. Raising capital is one such area that requires specific expertise, and you can employ a VCFO for help in just one area.

How It Works

Hiring a VCFO is a good investment in your business. He is not simply a controller or accountant, he offers an expert strategy that you can only get from a chief financial officer who has experience in big-business as a C-level executive. The help and advice such a person can give are invaluable to a small business.

Your high-level strategist will meet with your management in at least six virtual meetings a month. These face-to-face discussions are not only productive for your business but also help give you peace of mind that an expert is in charge of your financials. These meetings will continue as usual because they are virtual everyone at home can still join. Each area will be discussed, including cash flow, financial review, best financial business practices, banking, and long-term goals.

Your VCFO will learn as much about your business as you know and customize her services to best serve your financial goals. The most common services required during these unusual times are:

  • An overview of accounting records for an accurate picture of operations. You need accurate financial information at all times, but these days it is especially vital because your finances may not be up to standard. You need strategic help on how to remedy the situation to continue until things get back to normal
  • A balance sheet that includes income and cash flow statements that are compiled according to the standards of generally accepted accounting principles (GAAP). These statements will be suitable to give to stakeholders and bankers.
  • Right now, forecasting may be essential to decide actions to take during this difficult time. A VCFO will analyze the goal of the company and give you a 12-month forecast of your future, so you don’t meet any surprises. Your VCFO will take you through the different drivers for revenue and expenses. You will get expert advice on several different scenarios to understand your best course of action.

If your small business is struggling to maintain some kind of normalcy these days, you may consider a virtual chief financial officer. He will help you make the right decisions about your assets and expenses and help you weather the necessary lockdowns.

 

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