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Valuable skills of a Virtual CFO: stakeholder engagement
12 January 2022 | Minutes to read: 2

Valuable skills of a Virtual CFO: stakeholder engagement

By James Northcote

Virtual CFOs possess unique skills that enable them to assist growing businesses in many ways. Here, we explore one particular skill that a Virtual CFO can offer your business – effective stakeholder engagement. Engagement with key stakeholders external to your business, including bankers and lawyers, is crucial to its ongoing success.

Virtual CFOs have significant experience engaging with bankers, lawyers and other professionals, and can enhance your relationships with these providers. Your VCFO will often have an existing relationship with the bank or legal firm you’re working with. These relationships can provide insight into how to most effectively engage these stakeholders.

Engagement with bankers

For many businesses, their relationship with the bank will be one of their most important relationships. This is particularly the case for businesses with a large amount of debt, tight cash flow, or poor trading profits. Your VCFO can assist not only by providing the required supporting information, but also by advising on the most effective narrative and messaging your business should proffer to its bank or banks.

Information presented in a meaningful way will assist your banker to work constructively with and for you and can improve the working relationship. Information that your VCFO can prepare and present to a banker includes:

  • Monthly/quarterly reporting
  • Annual or three-monthly rolling budgets
  • Future year financial forecasts (usually up to three is appropriate)
  • Covenant reporting, and
  • Brief written summary, highlighting trends or key points.

When presenting the above information, your VCFO can highlight the key business drivers and trends and their impacts on the business. Your VCFO can also ensure a consistent message is communicated to aid the banker’s understanding of and confidence in the business. Importantly, your VCFO understands what banks want to see and will ensure this is presented clearly and concisely. The VCFO will also identify any potential issues with you in advance of the information being released to the bank.

Engagement with lawyers and other external stakeholders

Lawyers are extremely valuable business partners. A VCFO can understand when and how your business should engage with a lawyer. They can also ensure that a clear and concise explanation of the outcome of that engagement is provided to you, the business owner.

Similarly, your VCFO can direct your lawyer to ensure meaningful work is undertaken and that the outcomes achieved align with your business strategy. Your VCFO can also work constructively with the lawyer to provide commercial solutions for a particular transaction.

Engagement with other external stakeholders including property or business valuers, insurance brokers and other lenders, may also be required at certain times and your VCFO can provide appropriate direction to ensure the desired outcome is achieved.

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

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

Skills of a Virtual CFO: Accounting and Financial Reporting

 

Valuable skills of a Virtual CFO: stakeholder engagement

James Northcote

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