How Does A CFO Add Value to Your Business? How Much Does a Virtual CFO Cost?

Managing the financial operations of any organization is no small task; often, the survivability of the company depends upon proper financial management. This makes the position of the CFO a major one in any organization. However, hiring a CFO comes with its own caveat: the services are expensive, and not all organizations can afford a full-time CFO.

But there is a simple solution: a virtual CFO or virtual CFO services!

Such a post is becoming increasingly popular with startups and small businesses that might need CFOl services from time-to-time, but do not need a dedicated employee for such a task. When companies compare “virtual CFO fees” with full-time CFO or part-time CFO recruitment costs, there is a huge difference between the costs. The virtual CFO costs or CFO for hire rates seem quite manageable and affordable.

A virtual CFO provides services to a company as and when required, ranging from financial planning and maintaining/reporting financial activities to suggesting measures to control expenditure.

A virtual CFO can provide one-time help or meet and discuss with their clients on a regular basis. But how does one acquire a virtual CFO? This guide can help you weigh in on the services virtual CFOs provide, as well as understand virtual CFO costs, services, and hiring processes.

How A CFO Adds Value To Your Business

Financial Planning For Operations And Projects

A CFO is responsible for the financial side of all operations: the budget, cost-cutting measures, financial strategies to generate profit, risk management, and so on. Any project will need a financial roadmap to ensure efficient expenditure that pays off well for the company.

A CFO’s job is to provide this roadmap, allowing the company to gauge its profits, expenditure, and possible financial outcomes of the project. This helps in optimizing the financial performance of the project to its fullest extent, which can be beneficial for companies that are cutting close to their budgets and cannot afford additional costs for a project.

Financial Risk Management And Prevention

A CFO’s job is not merely collecting and reporting financial information or charting the financial course of the project but also anticipating challenges and devising solutions to weather the storm.

The market often tends to be unpredictable, so hiring virtual CFOs can make it easier to navigate the complex business space filled with uncertainty. A CFO will be responsible for making backup plans in case the risk does not pay off and attempt mitigation of any financial damages that the company may suffer.

This works especially well for small businesses, as they need to take major risks to be considered serious market players, which makes hiring a virtual CFO absolutely a necessity for them.

Financial Forecasting

A major asset to a company’s decision-making is financial forecasting, where market research is used to make predictions about the future of a project and undercover trends in the market that can be used for the benefit of the project.

It allows the company to make detailed projections for income, expenses, and major operational decisions. It helps the company estimate several key needs, such as income, cash flow, when to get new hires, what products or services to promote, when to introduce new products, and so on. This means that forecasting is essential to optimizing the growth of any company and helps companies save money as well as labor.

Budgeting And Planning For Operations Expansion, New Ventures

Any company that makes it big will desire expansion into new territories and sectors. It will also want to introduce new products or services to consumers. A virtual CFO can be specially hired for such a purpose. By helping with budgeting, the CFO can make it easier for companies to start new product lines and ventures by optimizing expenditure on other existing ventures. If the company wants to expand operations to new geographies, the CFO can help with the nitty-gritty of financial management in new territories which might be unfamiliar to the company.

Winning Confidence Of Investors, Bankers, And Key External Stakeholders

Good investors and stakeholders can help a company survive the worst through their monetary infusions, but in return, investor relations must be maintained. It is important to establish and maintain the trust of the investors, and CFOs can do the job of representing the company in front of such stakeholders.

By providing important financial reports of the company’s growth and representing the company as being capable of adapting to market changes, a CFO can change the image of the company for the better in front of stakeholders. Once such trust is established, investors might be interested in repeat investments.

Financial Analysis And Strategic Planning For Corporate Real Estate Transactions

If the ordinary business world is complex, the corporate real estate space is even more so. It is difficult to navigate and requires skilled and experienced CFOs to strategically work in this complex area.

Analysis And Insights To Improve Liquidity, Cash Flow, Funds Availability

Similar to the points mentioned earlier, a CFO can make sure that a company is able to pay its dues on time without defaulting on them. At the same time, CFOs can ensure through proper budgeting that cash flows are stable, as well as determine the availability of funds. If they find certain products to be unprofitable, they can flag them and ask them to be removed. They can also ask unproductive assets to be sold off and shift focus on other key areas that are more productive.

Should You Hire A Virtual CFO?

Virtual CFO services

A CFO generally interprets data to produce results, forecasts results, and helps steer the company towards its goals. Generally, the CFO also acts in conjunction with the CEO to provide advice, helping the top brass make profitable decisions. CFOs also give you a competitive advantage, as they can help cut down waste, optimize expenditure, and plan ahead of time. Such services are delivered on a daily basis or on-demand according to the needs of the company.

Differences: Virtual CFO and in-house CFO

Both types of CFOs provide similar services for their employers, but they have certain differences. Firstly, a CFO has a designated seat at the company and is liable to attend board meetings, and is answerable to stakeholders.

On the other hand, a virtual CFO is not always available on-site but rather provides their services remotely. A virtual CFO can work for multiple businesses at the same time and therefore has more expertise regarding market trends, owing to the fact that virtual CFOs are generally capable of working in multiple sectors.

This allows them to give you feedback almost instantly, in comparison to an in-house CFO who might take some time to understand the workings of the company. Obviously, the cost of CFO hiring is a big factor. Virtual CFO fees are comparatively less than the cost of CFO hiring for a permanent role.

Costs of Virtual CFO services

A virtual CFO charges according to the services provided, and so the costs can vary by a huge margin. However, experienced CFos typically charge between $3000 to $10000 per month, with the majority falling in the $5000 to $7500 range. Depending on the complexity of the task, this cost might be higher, depending on the role: the virtual CFO might be a bookkeeper, an accountant, or a controller.

Conclusion

Virtual CFO services can be a boon to organizations looking to make the most of their limited funds. Virtual CFO costs can be much more affordable than the typical cost of CFO recruitment for a permanent role. Find out more about virtual CFO services from the best CFO headhunters at Alliance International.

Alliance International

Alliance International is a leading global recruitment, staffing, and executive search company with an experience of over a decade in C-level recruiting.

We are deeply committed to understanding the business model of our clients, and our C-level headhunter staff uses simple yet effective procedures to make sure candidates perfectly fit the requirements of the company. We provide C-level staffing for both short-term projects and long-term or permanent positions. Our teams of industry experts work around the clock to bring the best talent from across the globe through our expansive global networks.

Connect with us if you’re looking for a C-level recruitment agency with both expertise and experience in your industry.