You will be surprised to know that virtual CFOs are a bliss to the large organizations handling high volumes of bookkeeping, financial reporting and statutory compliance. Also, they are perfect for small organizations that cannot afford to hire a CFO.
Traditionally, a CFO is an in-house employee with great power and responsibilities. They are paid huge amount for money and take care of financial and accounting tasks that are crucial to an organization’s operations. This blog is a revelation on how virtual CFO can do it all like their in-house counterpart.
Why there is a sudden demand for Virtual CFOs:
- Changing technology and increased competition
- Tax preparation and compliance is getting complicated day-by-day
- High operational costs in many fields
- Unavailability of senior level CFOs and financial experts to work for smaller firms
- Workforce models in many industries are changing to complete remote
Virtual CFO roles and responsibilities
CFO of any company adorns a leadership role that the subordinates and colleagues respect. Can a virtual CFO showcase same kind of leadership? The truth is that they can be the much needed coach and guide through online platforms. Virtual or in-house what matters is the knowledge of the person. Identification of the key metrics, advice on cash efficiency or opinions on how to cut down expenditures, etc. all this information can be communicated virtually. What becomes a burden is when legal affairs, daily in-house involvement and investor relations are outsourced? Most virtual CFOs do not undertake such tasks.
- Creation of solid financial criteria that constructively challenge the commercial and operational
- Navigate complex analytics using specific software
- Profitability analysis and taking business in par with competitors
- Driving actions by drawing solid financial data
- Navigate challenging projects in the right direction
- Tracking cash flow
- Generate more ideas to steer an organization’s operational excellence
- Drive innovation and growth
- Planning financial and budgetary control goals
- Finding ways to increase profit and managing financial activity
- Plan of action to drive long-term performance
- Strategizing the entire financial function of a company
- Understanding and creating financial insights
- Available 24/7 to discuss clear, crisp and relevant information
- Top-notch financial vocabulary skills
- Great interpersonal skills
- Perfect written communication dexterity
- Email writing perfection and clear knowledge on how to write financial data and information
Reading the above list, one might think that these are an in-house CFO’s role and responsibilities. But do you know the salary range of a mid or senior full-time hired financial professional? In 2015, the highest paid CFO of Facebook named David Wehner take home salary was $16.8 million for a year (Source: getsmarter.com).
A CFO’s adroitness in strategic planning, financial modeling, risk management and financial compliance management ready them to be in the slot of some of the most highly paid professionals in the world. However, if you are running a small or medium scale organization, you cannot afford to pay a CFO to work for you full time, if you do not have huge lump some profits or any other constant resources.
This is when you can think about hiring a virtual CFO, they are professionals ready to freelance and work from remote locations at affordable prices. Taking the extra clutter on your plate away and doing each of these tasks with precision will give you more time to do things that are crucial and save money.
QUALIFICATIONS OF A VIRTUAL CFO
- Education background in accounting, finance or business
- Years of experience are adorning a senior role
- Worked as a virtual professional for many financial projects
- High language and communication skills
ONBOARDING A VIRTUAL CFO
- Unlike other VAs, a CFO will take some extra amount of time to take up his or her role in an organization, because learning the entire financial status of a company will take time.
- It is advisable to conduct regular meeting for a few months post on-boarding a virtual CFO to align the team, process and technology.
- Report sharing and other communication channels should be designed according to the convenience of a business.
- Set the key metrics and goals to achieve the financial and accounting goals.
- Secure and stable online platforms should be established because it’s the important documents that the company is sharing remotely with the top financial professional.
- Rework on the balance sheet to see the actual financial situation of a company.
Organizations can benefit from hiring CFOs to elevate financial functions. However, it is most useful to small organizations who cannot hire a full time financial expert ready to give insights on financial strength and weaknesses. Also, inexperienced company owners and first timers need special advice from an expert concerning investment strategies, drive financial planning, tax tasks, etc. But the catch 22 situation is that they cannot afford to hire a CFO and a virtual CFO is a true blessing to them.
In a full-fledged VA agency like Ossisto, you get the service of a virtual CFO within a quick-turnaround time. So, make the most out it and switch to the modern work force of smart and intellectual experts giving their valuable time to multiple projects and earn more. A virtual CFO can also perform back-office function tasks such as managing accounts ledger. So, start making most of this new virtual service.
The role of a modern CFO is more than what the traditional professionals have to offer. Along with the mission critical older set of tasks, they have to indulge in driving success for a business strategizing to showcase profound transformation in financial operations. When it comes to leadership and non-financial knowledge, many CFOs fail. In a very important KPMG (*a global network of professional firms providing Audit, Tax and Advisory services) survey, ‘the view from the top’, 45% of CEOs voiced their opinion on how CFOs lack commercial experience and 41% believed that they lacked necessary leadership skills.