How hiring a virtual CFO can take your business to the next level

A common complaint amid SME owners is  they don’t have time, or the inclination, to stay across the finances of their business. Typically they’ll keep an eye on the cash at bank and perhaps watch the invoicing going out, but they won’t be looking at the broader picture, nor will they be running budgets and forecasting the financial picture much further than the next month. This is usually due to a mix of being time-poor and a lack of interest.

They also know that hiring a senior finance person isn’t the best use of resources in a small business, especially when they are already paying for a bookkeeper and an external accountant to handle their tax.

Many small-to-medium business owners will have their data-entry needs all locked away with a good bookkeeper and they’ll have a tax accountant to handle the year-end tax returns, but they find they have a need for ongoing advice during the year. This advice is largely financial in nature, but can also cover things such as the strategic direction of the business, staffing issues and much more.

More than this, owner-operators of small-to-medium businesses can often feel isolated running their businesses. It’s often not appropriate for them to discuss business issues with their staff and they’d rather not take it all home to dump on an unsuspecting spouse!

This is where a virtual CFO can step in. What is a ‘virtual CFO’? Also referred to as an ‘outsourced CFO’ this is a service designed to bridge the skills gap present in an organisation that needs high-level financial advice, but doesn’t yet require a full-time employee in the role.

Every business is a little different from the last and a good virtual CFO will tailor their service to meet the needs of your business, but as a guide this might form a typical month of working with one:

* Keeping an eye on your business numbers remotely
* Preparing monthly financial reports with analysis
* Creating and monitoring KPIs via dashboard software
* Budgeting and cash flow advice
* Proving advice regarding staff remuneration and incentives
Attending monthly meetings to discuss everything
* Last, but not least, being available to take your calls, emails and video chats

All virtual CFO service providers offer slightly different sets of skills and experiences, but really, the above activities form the loose core of what you should expect from anyone providing this kind of service.

The price you pay will largely come down to the expertise of the person you’re working with and the amount of time they’ll need to spend working with you each month. Either way, it can represent an excellent investment for businesses looking for additional support and strategic advice, but don’t need (and can’t afford!) a full time person in the role.

Having this function outsourced has a number of benefits, but the key one is the peace of mind that comes with knowing someone has your (financial) back. Someone is keeping an eye on things and is available to offer advice and guidance whenever you or your business needs it. They can help roll out your strategic plans by preparing forecasts and financial modelling so you can really see what those growth plans look like and allow you to prepare accordingly. If nothing else, having someone in this role might simply give you the confidence to know that you’re doing the right things for your business at the right time. This in itself can be a great motivator.

As with all of these things it pays to ask around to get a recommendation from someone you trust. Failing that, ask your accountant. Many forward-thinking accountants are offering this kind of service these days and would be more than happy to discuss your needs. Just be clear about what your needs and expectations are and you’ll be off to a solid start.

Written by Ben Fletcher, managing director at Generate. A version of this article was originally posted on their Better Business blog.


Generate are not your typical accountants. We provide operational and strategic support to creative and innovative businesses of all stripes and colours. 

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