What is a Virtual CFO and how could they help your business
19 July 2021 | Minutes to read: 3

What is a Virtual CFO and how could they help your business

By Nick Kenny

With the transition to real time accounting using cloud-based software, an increase in flexible working arrangements and the need for businesses to continue operating throughout the pandemic, there’s been a strong emergence of the Virtual CFO role. But what exactly is a VCFO and how could the service drive growth within your business?

What or whom is a VCFO?

A VCFO is a person or an accounting firm engaged to provide CFO services to one or more businesses on an ad-hoc (as required) or part-time basis. It’s often small to medium-sized businesses that require the service, due to not having enough duties for a full time, in-house CFO to fulfil in order to justify the expense. Your VCFO could work on a weekly, monthly, quarterly or project basis and fulfil tasks including budgeting, forecasting, cashflow, reporting, financial modelling, strategic planning or specific project work such as preparing for a capital raise, technology implementation and training, loan applications or Advisory Board work.

A VCFO engagement is different to engaging an accountant to prepare your business’s annual financial statements and income tax returns. Rather than being a compliance driven engagement, your business engages with a VCFO for a specific objective that is designed to improve the performance of the business. A VCFO can also provide a tailored service, that evolves over time as your business grows and matures.

Why would you hire a VCFO?

  • With the CFO salary in Australia starting at $250,000 and getting much higher in some instances the VCFO option provides businesses with the opportunity to get access to a professional with both business and financial expertise at a fraction of the price of hiring a full time CFO.
  • A VCFO might have access to expertise not readily available in the business
  • They will hold you accountable to your business’s financial and strategic goals
  • Access to wider industry knowledge, and
  • A VCFO will be impartial to your business and able to recommend strategies without bias.

When would you hire a VCFO?

  • When you’re not receiving timely or meaningful reporting on the performance of your business
  • When a business is experiencing significant growth in revenue
  • When there are plans to sell the business in next three to five– years, and/or
  • When decision makers are in need of strategic guidance
  • When your CFO is on extended leave such as long service or parental leave, and/or
  • When you need to fill the CFO role temporarily while you hire a permanent CFO.

Skills required of a VCFO

Aside from well-honed accounting skills, a VCFO should be adaptable and able to meet the changing needs of a business. A VCFO should have demonstrated experience working in a commercial business environment and a strong business acumen.

It’s important that a VCFO is technologically savvy with advanced understanding of cloud-based accounting software and the ability to easily switch between different systems. There is now a range different accounting and business software in the market, each with their own benefits. What best suits one company will be different for another, so it’s imperative that a VCFO is across the different options and can help you to evaluate the systems available, finding the right fit for your business.

Also high on the list of required skills are communication skills. To reach the best outcomes, a VCFO needs to ask questions of management and staff and will need to work reasonably closely with key decision makers.

And just as you’d hire people with industry experience for other roles in the business, it’s beneficial that your VCFO has experience in the sector your business operates in.

These aren’t an exhaustive list of skills, nor have I provided a complete list of reasons for when and why you’d hire a VCFO, but rather, the most common reasons cited in my experience.

If you’d like more information on William Buck’s Virtual CFO service and how it could drive growth for your business, please contact your local William Buck AU Business Advisor if you live in Australia, or William Buck NZ Virtual Finance Management Team if you live in New Zealand.

You can read the other articles in our Virtual CFO series via the links below:

Technology and the future Virtual CFO

Valuable skills of a Virtual CFO: stakeholder engagement

Valuable skills of a Virtual CFO: Accounting and financial reporting

What is a Virtual CFO and how could they help your business

Nick Kenny

Nick is a Director in our Business Advisory division with a wealth of experience on how to use accounting systems to drive business efficiencies. Supporting clients across a range of sectors, he's expertise includes review of legacy systems, providing advice on new technology systems, virtual CFO applications and conversion of accounting and business software to cloud based programs.

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