Benefits of hiring virtual CFO for an SME

• October 15, 2020

With the rapidly changing business scenario, the traditional role of virtual CFO has been changing considerably thanks to a multitude of issues like economic factors, strict government regulations, and financial burdens etc, faced by companies of all sizes and shapes. Let’s cast a cursory glance at how a virtual CFO can prove beneficial to SMEs.

Compliance and record keeping

All the SMEs face compliance issues at one or another time. A good virtual CFO handles all such issues effectively. Filling the tax papers and paying the tax is one of those issues. They also take care of duties concerned with the shareholders and they are also responsible to prevent frauds and the leak of secret financial information of the company. Besides, they work hardly to protect the vital assets of the business, keep the accurate book records, and talk to board members and inventors about the value and risks. Taking into account the current performance of the company, the virtual CFO forecasts the financial trends including revenue and profits, and formulates long-term programs to achieve certain financial goals.

Strategy and planning

A Chief Financial Officer (virtual CFO) typically focuses on how efficiently a business is operating. He is not only responsible to report the numbers but also manage and control the financial functions, and stay reactive to events as they unfold. In today’s fast moving business world, the VIRTUAL CFO sets long-term goals by applying his critical thinking skills and financial acumen.

Managing the financial affairs properly

A virtual CFO is responsible to control and manage the cash flow position throughout the business, understand the uses and sources of cash, valuable documents and maintain the integrity of securities and funds. His responsibilities also include an authority to establish and implement financial procedures and policies for credit and the collection, payment of bills, purchasing and other miscellaneous financial obligations. Cash is the king and the cash flow or flow of the cash is the most critical job the virtual CFO has in any SME.
Optimizing the fund raising and Treasury (cash management process)

He is also responsible to obtain funding and cash for the functioning of the business. In this respect, he must have good knowledge about specific lenders and banks that may assist the SME financially. If such a funding source is not available, he must be able to arrange funds from other sources such as financing through private investors or taking cash out of your business equity if that is possible. As the virtual CFO, he’ll develop the long-term strategic plans of an SME, assess the financial needs implicit in these plans, and develop proper techniques and ways to satisfy the financial needs and requirements.

Maximizing the revenue and reduce costs and overheads

By analyzing and suggesting pricing strategy, reducing costs and improving the productivity, a virtual CFO can impact the bottom line. He looks for opportunities at increasing revenues and reducing / controlling costs in order to maximize profits. Besides, a good virtual CFO also explores new opportunities and new markets which are yet to be explored. In this way, he brings new business opportunities for SME by instigating new valuable contracts in new markets.