In today’s dynamic business environment, many organisations recognise the need for high-level financial expertise to guide strategic decisions and ensure robust reporting. However, the demands or resources may not yet justify a full-time, in-house Chief Financial Officer (CFO). This is where a Virtual CFO (VCFO) becomes an invaluable asset.
A VCFO provides specialised CFO services to your business on a flexible, part-time or as-required basis. This model is particularly beneficial for small to medium-sized enterprises (SMEs), startups and businesses at a pivotal growth stage that require strategic financial oversight beyond their existing finance team’s capacity, without incurring the expense of a full-time executive.
What does a VCFO do?
The best part about hiring a VCFO is that you can tailor the role to meet your specific business needs, which may change over time. They can help you identify and engage other advisors when needed – e.g. banks, lawyers, valuers, other specialist advice.
The true advantage of a VCFO lies in their adaptability. You can choose how often they work for you and this may change depending on current projects and focuses. Their role will evolve depending on your business’s needs. The broad spectrum of tasks VCFOs help with includes:
| Tasks | Why is it important for your business? |
| Budgeting and Cashflows | Budgets and cashflow forecasts allow businesses to track against performance targets and set accountability. By setting targets, this can help manage overall costs and profit margins, as well as identify any potential cashflow gaps early. |
| Management reporting | Having regular reporting with up-to-date information allows business owners to make more informed business decisions. Regular reporting on KPI’s also encourages accountability regarding targets that were set in the budgeting stage |
| Board reporting packs (Financial and non-financial KPI’s) | Board meetings generally require a more sophisticated level of reporting than general management reporting. Developing a reporting pack that includes both financial and non-financial KPI’s, assists business owners, investors and potential investors when making decisions and providing strategic advice. |
| Board meeting attendance/stakeholder engagement | Financial information presented by a trusted advisor lends greater certainty for investors and board members. |
| Bank and finance covenants | Financing arrangements with banks and other lenders are often under strict covenants or conditions. Having up-to-date, accurate and regular reporting packs ensures transparency and help maintain a good relationship with lenders. |
| Audit or Exit preparedness | Robust internal controls and streamlined financial processes allow business owners to be ready for audits or an exit. These ensure data integrity, provide transparent and accurate reporting for due diligence and support a smoother, more confident engagement with auditors or potential acquirers. |
Deciding if engaging a VCFO is the right step for your organisation involves considering your current circumstances and future ambitions. A partnership with a VCFO often proves most impactful when your business is:
- Experiencing or planning for significant growth or the scaling of operations.
- In need of more sophisticated financial reporting and analysis than your current team can provide.
- Lacking dedicated strategic financial leadership internally but is not yet in a position to hire a full-time CFO.
- Preparing for major transactions such as capital raising, mergers, acquisitions or formal audits.
- Seeking an objective, external perspective to challenge current assumptions and help guide financial strategy.
When looking for potential VCFO’s, it can be beneficial to look for a demonstrated understanding of your industry, a flexible and scalable service model that can adapt to your evolving requirements, strong communication practices and a clear articulation of how they will support you in achieving your business goals.
Ultimately, the right VCFO relationship will function as a collaborative partnership, focused on helping you navigate your financial journey and make well-informed strategic decisions.
If you would like more information on William Buck’s Virtual CFO service and how it can help you achieve your business’s goals, please contact your local William Buck advisor.
