What is a CFO?
The chief financial officer is the officer of a company that has primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financial reporting and in some sectors, the CFO is also responsible for analysis of data. Small businesses cannot typically afford chief financial officers.
What is a virtual CFO?
The Virtual CFO is a relatively new concept. It's a way for small businesses to get CFO support that they wouldn't have been able to afford previously.
Small businesses that hire a Virtual CFO get access to an experienced financial professional at a fraction of the cost of a full-time CFO. The services will differ from firm to firm, but usually a Virtual CFO will:
- Handle all the duties of a traditional CFO, but work remotely and on a part-time basis.
- Monitor the financial health and well-being of the business, usually with cloud technology.
- Offer financial insight and guidance on all company decisions and issues.
- Provide back-office functions such as managing accounts ledgers, depending on the client and their needs.
Advantages for small businesses
Having access to a Virtual CFO can be a big benefit for a small business. Most of them can't afford an experienced, knowledgeable CFO on a full-time basis and may never consider hiring one.
That's a problem, because many small businesses fail within the first three years. Reasons include failure to set themselves apart from the competition, and an inability to find a profitable business model. With an accounting professional acting as their Virtual CFO, they could keep their financial goals and realities clearly in sight.
What’s the difference between an accountant and a CFO?
An accountant will:
- Maintain profit and loss records
- Ensure your business remains compliant with financial regulations and tax
- Check the accuracy of important financial documents
- Help you plan your business, identify and assess costs, and structure accordingly.
A CFO will:
- Monitor the financial health and well-being of your business
- Offer financial insight and guidance on all company decisions and issues
- Provide back-office functions such as managing accounts ledgers, depending on your needs
- Create budgets and forecasts.
- Pinpoint problem spending by highlighting trends in the market
Ask us how our CFO services can benefit your business on 021 225 6425 or email.