The Growing Demand for a Virtual CFO

The growing need for financial experts in business has become even more evident given the current economic situation. Having said that the demand has been growing for a while. The concept of virtual CFO service though not a new trend, is a growing one, especially given the difficulties faced during the COVID19 pandemic.

There are multiple reasons why there is a higher demand for a virtual CFO. As business becomes more complex and the CFO is required to wear many hats, Startups and businesses are now more than ever searching for opportunities to operate smoothly.

The rise of the virtual CFO has a lot to do with more significant demand for the full-stack CFO–one who skillfully delegates resources like their team, technology, and strategic partners effectively while also being available to the client’s convenience. Here are a few reasons why we see a significant rise in the demand for a virtual CFO.

Given the toll the pandemic has taken on the market, many Small Businesses and Organisations look at effectively cutting down the costs to sail through troubled times. Here is where hiring a VCFO can help offer the level of services that can be availed with a nominal amount of the actual cost.

Many CEOs of start-up companies and business owners have less experience in Financial Management. This provides another great opportunity for companies to hire a VCFO. Whereas, for complex business problems, even the big organization in India hire a VCFO to complete the specific task successfully.

Small to Mid-Size Business Owners and Organisations are more quality conscious than ever before and are demanding high-quality financial assistance and would like to keep their fixed cost minimum and get to choose a VCFO’s services as and when required. Companies and Business owners would like to scale up their operations and with the help of VCFO help them make long-term action plans through financial planning, fundraising, and identifying areas where money can be invested.

VCFO is needed to meet the compliance requirements, change the regulatory environment, and take care of global accounting standards. Business owners and CEOs would like the peace of mind to spend more time on core business activities instead of spending more time on Books.

Most business owners do have urgent tasks to take care of and that’s where VCFO comes on a Hire on Demand basis take care of those frequent urgent tasks which help the business build and give a boost to its financial situation. In order to generate accurate reports and analyze the findings, a CFO will also provide bookkeeping services that will define and monitor the bookkeeper, providing insights that help guide the organizations towards the specified objectives. This in turn can help companies understand precisely where, where, and how your team can be centred and keep the stakeholders satisfied.

Reasons why hiring a VCFO is good for business

• A virtual CFO draws in the necessary experience into increasingly complex business scenarios. For quite a while now, the market has experienced a more complicated business world. Certain added challenges that arise from globalization, cloud management, multi-channel needs, and added demands on businesses at an earlier stage also play a key role in further making this process complex. Having said that, aspects affected by COVID, around PPP loans, EIDL loans, the mainstream lending programs, cash flow forecasting, scenario planning, employee tax credits, and other tax impact changes increase the need for CFO With these ever-changing and growing obstacles, the virtual CFO has been able to help businesses pivot quickly and effectively.
• Agility is one of the prime aspects that a virtual CFO offers. As businesses grow and change, the need for agility is crucial. This can be witnessed not only with current COVID-19 related changes, but also high growth moments or significant shifts in markets. Full-stack or virtual CFOs have much more access to resources. They also offer their expertise in order to help companies remain flexible and provide more opportunities to adapt quickly and be proactive. Virtual CFO services give flexibility for start-ups and SMEs that can help them organize their finances at one-third the cost of a full-time CFO at their own convenience and as per need.

You set the conditions for time and expense that suit well for your company when you employ a Virtual CFO. This might mean that the VCFO may have to work full time for a certain amount of time and then switch to a part-time or fractional basis. When the specifications are adjusted, you can scale up or down. Without losing the kind of skills and knowledge that you need, you pay for the time and deliverables specific to your business. Based on the client requirement, the VCFO can adopt the necessary technology.

• As working remotely from home has become very common for early-stage businesses, and is now a necessity for all businesses during the pandemic, it is visible how teams are successfully integrated technology and teamwork in these virtual environments. Similarly, a virtual CFO is integrated. Since this foundation has already been established and companies are gaining confidence around its effectiveness, it gives them a better understanding of how virtual CFO services are effective. And how it can be an integrated part of their team, regardless of not being in the office.

A Virtual CFO’s life leaps into a scenario and quickly works out things even though they are not physically present. They have the experience of joining the mid-process and rapidly analysing what needs to be executed from a financial point of view, right from collecting data, improving financial statements, to introducing better accounting procedures.

Keeping all these factors in mind, if your business is increasing drastically and investor funding is what is in the cards for you, then a  VCFO could be crucial in securing the financing. A virtual CFO ensures that all processes run smoothly, should you plan to take on any big financial deals. This could include a big merger or takeover. The VCFO will then assign responsibilities and challenges to the right people at the right time to prevent any possible mishaps.

Recruiting a virtual CFO also gives you the benefit of versatility. For instance, if you need someone to help assess a big project, need help in building medium-term strategic financing, or just want to measure how well a CFO will help drive the company progress, hiring a virtual CFO is a brilliant option to go for. VCFO help build a network of strategic partners to support any of the client’s additional needs, provides consistency, and the best solutions created by the team to facilitate the growth of the organization. As virtual CFO service develops as a sector in India, it is crucial to also keep in mind that technology can play an important part in onboarding more clients.

By Jay Desai, Founder Keeping Your Account (KYA)