Is your internal finance function stretched to capacity?
1 March 2023 | Minutes to read: 3

Is your internal finance function stretched to capacity?

By Nick Kenny

Several factors have combined to leave many internal finance functions stretched to capacity. These include rising costs, a deep skills shortage, and rapid evolution of the CFO mandate to include functions such as risk, governance and HR. The good news is, there are outsourced Virtual CFO options that can be engaged on a project basis or in more of a permanent capacity to close gaps and provide your business with access to valuable skills and expertise that can deliver measurable benefits across the internal finance function.

The Virtual CFO is one of these cost-effective options.

In today’s environment of rising costs and higher interest rates, businesses need to be mindful of keeping overheads as low as possible. This is driving a trend for Australia’s small to medium enterprises (SMEs) to engage a Virtual CFO – a finance professional who performs the role of a traditional Chief Financial Officer, or fills specific requirements, though on a contractual rather than full-time basis, often with services delivered remotely.

While many startups and SMEs, particularly those in their scaling phase, cannot afford a permanent CFO, the majority are in dire need of their skills. Indeed, a virtual CFO often fills a skills gap that exists across many SMEs and this is where the appeal of a Virtual CFO lies. It gives a business the ability to tap into the expertise of an experienced CFO on an ‘as-needed’ basis.

This makes a Virtual CFO, also known as a VCFO, a highly affordable resource, and the experience and insights of a VCFO can deliver a variety of benefits across the business including developing strategy and making key decisions. When it comes to your business’s internal finance function, a Virtual CFO can play a critical role.

Here we look at four key areas where a VCFO can add value to your internal finance function.

  1. Review of current processes and resources
    Business owners are often too close to their enterprise, or are simply too time-poor, to undertake meaningful analysis of their current teams, processes followed, and the availability of resources.A VCFO can recognise whether your team is under-resourced, which can lead to employee burnout and high rates of turnover. Conversely, analysis may reveal your team is over-resourced, which can mean you’re incurring unnecessary costs.In a similar vein, a VCFO can identify bottlenecks and inefficiencies, subsequently developing a plan to eliminate waste to provide actionable insights on how your finance team is interacting with other business units.
  2. Provide best practice solutions
    By drawing on their wealth of experience, a Virtual CFO can suggest best-of-breed technology-based solutions to eliminate a range of possible roadblocks that can slow the finance function.Potential solutions may include automating the flow of information between systems and software, strategies to implement a 3-day month-end close, and more efficient ways to collate data from multiple sources. The result is more timely financial information, allowing business owners to make critical decisions faster.
  3. Setting meaningful financial and non-financial KPIs
    A Virtual CFO will be able to work with your finance and operations teams to set financial and non-financial KPIs that will allow the business owner to measure their business performance. The KPIs should provide insight on the future performance of your business (i.e., lead indicators) and of its past performance (i.e., lag indicators).A Virtual CFO will be able to include the businesses performance against the KPIs as part of the reporting process of the business.
  4. Education and training
    Upskilling your team is a worthwhile investment – one that gives your business the benefit of high-quality talent leading to better risk management, greater understanding of growth-generating strategies and the skills to navigate future growth. Demonstrating that you value your team through supporting them with ongoing training and development has also shown to greatly improve retention rates.A VCFO can be an outstanding resource, one that SMEs can leverage through education, training and ongoing mentorship to help their finance team reach their full potential. A Virtual CFO can also be tasked with assisting and mentoring permanent staff with their technical development.

The best of both worlds

The upshot is that a Virtual CFO offers the best of both worlds – the financial acumen and experience that all SMEs can benefit from, at a fraction of the cost of a permanent CFO.

If you would like more information on William Buck’s Virtual CFO service and how it can help your business reach its goals, please contact your local William Buck Business Advisor in Australia or New Zealand.

Is your internal finance function stretched to capacity?

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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