When your business is only just starting out, hiring a Virtual CFO can seem unnecessary and perhaps even a waste of money. However, waiting until it’s too late to hire one, can prove extremely detrimental to your business and could even see your business fail completely – and nobody wants that, right?
So, what exactly is a Virtual CFO? Who should hire one? And why should you hire one before it’s too late?
In our latest proCFO blog we answer these questions for you.
What is a Virtual CFO?
You may be wondering what a virtual CFO is exactly.
Well, a Chief Financial Officer (CFO) handles everything related to a company’s finances, such as overseeing cost-benefit analysis and securing new funding.
While a CFO serves a vital role in a company by providing financial management, it can be difficult for small businesses to afford a full-time, in-house CFO or see the value in doing so.
This is where the virtual part comes in. A Virtual CFO is, in other words, an ‘on-call Chief Financial Officer’, enabling you to effectively gain solid and ongoing financial support, without the commitment and cost of a full-time CFO.
Who should hire a Virtual CFO?
Did you know that well over half of businesses in Australia do not have a trusted financial person that they liaise with at least once a month? That’s a large number of businesses that are effectively flying ‘blind’ – they have no regular guidance from an expert about the financial status of their business.
Beyond simply not knowing that they require a Virtual CFO, these businesses are also reluctant to spend the money.
Unfortunately, it’s during those first few years when a business is just starting up, that establishing good financial resource management habits is so important, and, over time can make, or even break a business.
So, really, all business owners should be looking into hiring a Virtual CFO. And sooner rather than later.
Why should you hire a Virtual CFO before it’s too late?
What many small business owners don’t realise is that by not having a Virtual CFO, they may be already spending what they would be paying them, in lost profits and misspending.
Although neglecting this aspect of your business may seem to save a small amount of money in the short-term, it can have dire consequences in the long-term.
This is one of the major reasons so many small businesses close their doors within the first two to three years of operation.
Here are some of the many reasons why you shouldn’t wait until it’s too late:
- Make informed decisions early
A common theme among small business owners is that they don’t understand or value the importance of a Virtual CFO until
after a dire financial issue has occurred – sound familiar?
By waiting until after an issue has occurred, the issue will be much harder to fix, cost your business substantially more money, and in some cases, the problem may even be irreparable.
- Learning how to interpret financial information early will help you later
Another common theme among small business owners is a lack of understanding when it comes to interpreting financial documentation and information.
A Virtual CFO will teach you how to correctly interpret and understand your business’s financial information.
Learning this early on will help you become aware and clued up on potential financial issues within your business later.
- Cashflow
Without a financial professional at your side, it can be easy for businesses to make mistakes that could be costly down the road.
A Virtual CFO will help analyse and manage your business’s cash flow to ensure maximum efficiency and liquidity for your business.
Starting this process early on will not only save you thousands but give you peace-of-mind knowing that your finances are under control.
The role of a Virtual CFO goes far beyond that of a Bookkeeper or Accountant. With a Virtual CFO, you have all the benefits of a CFO without the significant cost of a full-time employee.
As you can see, by not hiring a Virtual CFO early on, your business could lose money, or you could make irreparable mistakes, because it could simply be too late.
At proCFO in Perth, we provide you with accurate, understandable and up-to-date financial data so you have the confidence to make the right decisions for your business.
Talk to us about hiring a Virtual CFO for your business today, before it’s too late!
About David Officen
proCFO Founder and Managing Director
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.
