Shockingly, well over half of businesses in Australia do not have a trusted financial person that they liaise with at least once a month. Despite the importance of good financial management, many business owners are hesitant to employ a professional CFO to help in the development of their business. Neglecting this aspect of your business may seem to save a small amount of money in the short-term, but can have dire consequences for long-term success. A proper financial management resource, such as a virtual CFO, can be very cost-effective, efficient, and allow far greater opportunities for future growth with the use of modern financial analysis tools. Below, we’ll explore some of the most important traits to look for in choosing a virtual CFO.
Virtual CFO Experience
As a minimum, they should hold accounting qualifications and preferably be a member of one of the professional accounting bodies. This ensures they have a high standard of education and must engage in ongoing training. While a less-experienced person offering cheap services may seem like a good deal, bookkeeping and financial management is a very complex area. An error on a business activity statement can become a serious compliance issue for your business. Ask the person you’re are considering for the job to provide a list of successful past clients.
The money you spend on bookkeeping should be an investment. A virtual CFO is your gateway to understanding your strengths, weaknesses, and future potential. Administrative tasks like data entry and reporting should be kept affordable through modern bookkeeping tools. Most importantly, an effective CFO will provide more than just numbers; they will be your guide for the growth and success of your business through comprehensive analysis.
Businesses come in every size, shape, and industry. As new markets emerge and new opportunities for your business develop, the product or service you offer now may be very different from the future. A virtual CFO will be able to tailor their services to meet your unique needs, whether now or later.
Effective bookkeeping is much more than just data entry. A bookkeeper backed up by virtual CFO will provide you with accurate, reliable, and insightful financial information. They will ensure you are always informed of your business performance. Most importantly, an experienced virtual CFO will identify where to reduce costs, how to obtain greater profits, and what methods will ensure positive cash flow.
Often, it is difficult to look at our business with impartiality. A set of new, well-trained eyes can offer keen insights the ordinary business owner can frequently miss.
A downside to outsourcing your financial needs to an ordinary bookkeeper or tax agent is a lack of assurance that your business will come first. Unless you employ a specialist virtual CFO your needs will likely come second when the inevitable tax and activity statement lodgement dates come around.
Business Development Tools
Your advisor should not just be the bookkeeper. Experienced advisors should also provide tools to promote the overall development of your business. Some useful examples include:
- Cash flow monitoring
- Identifying opportunities for enhanced profit
- Strategy and planning sessions
- Customer analysis and market research
Ask your or what other services they provide? In today’s competitive business market, basic bookkeeping services alone are not enough to maximise the success of your enterprise.
A Close Ally
Ultimately, a virtual CFO will treat your business like his or her own. The best will not see you as just another client or tax return to lodge. Look for someone that has low client numbers, ideally less than 20, as this will guarantee loyalty, close contact, and passion to grow your business as a partner, rather than just a customer.
As we’ve seen above, choosing a virtual CFO for your business is no easy task. However, exercising care in this vital decision will reward your business with a lifetime of effective financial management. To learn more about how the right financial advisor can ensure confidence and success in your business development, contact us at proCFO.
About David Officen
David is the Founder and Managing Director of proCFO.
David combines an accounting and consulting background with commercial experience both as a manager for large commercial businesses and as the owner of private and family businesses.