3 Signs You Need a Virtual CFO

3 Signs Your Company Needs a Virtual CFO

If you’re reading this article chances are you’ve got a few things on your plate right now. It’s likely you’re feeling overwhelmed or even confused by your finances, perhaps you’re growing faster than you anticipated, and you’re worried that growth isn’t sustainable. But you’re not entirely convinced you need a full-time CFO.

These are the 3 signs your company needs a Virtual CFO.

1). Time is an elusive, mythical sort of thing like a unicorn or centaur. You’re the CEO or COO and time is money. You don’t have time to read our article about the accounting terms every entrepreneur should know– nor do you have time to deep dive on how to read financial reports. This is when you should bring in an expert to look after all your financial how-to’s. In fact- a good virtual CFO should be able to provide financial strategy, projections, modeling and investor reports. Plus, we’re in the business of making accounting processes more efficient. So even for the items you do still want to keep your hands on, guaranteed they’ll operate faster than they did before.

Quick Time-Saving Tip:

Move your accounting to the cloud for easy anytime, anywhere access. Plus many cloud solutions also have a phone app that lets you see real-time dashboards (because we know you don’t have time to sit in front of your computer all day).

2). You keep talking to QuickBooks like it’s Siri. When you need a real person to give back sound financial advice about things like pricing strategies, inventory turnover, or equity and debt health, it’s time to hire a virtual CFO. We might work remotely but we’re real people looking after your books. QuickBooks can’t tell you when to scale at the appropriate time. You need monthly reports that measure and identify key growth drivers to support your business plan. When a company has outgrown QuickBooks, no matter how often you ask it questions it simply won’t provide you with the in-depth financial information you need. A virtual CFO is your on-demand answer.

Quick Financial Analysis Tip:

For a better financial breakdown be sure to use cohort analysis whenever possible so that you can isolate the main drivers behind an improving KPI.

3). Cash is exactly what it sounds like… cash. Right? Cash is not simply the money your business makes. Your free cash flow could either be an enticing carrot or a warning sign for investors depending on whether you’re operating in the black or red. If you are consistently running into cash flow issues or don’t know what to do with any surplus of cash it’s pretty clear you should hire the experts to come in and look after your financial health. A virtual CFO will monitor your cash flow, help manage your assets, implement a strict accounts receivable cycle and mitigate your risks with internal controls like expense policies.

Quick Cash Management Tip:

Take a small portion, say, 10% of your monthly revenue and set it aside. Take the majority, or other 90%, and sit down with your newly hired virtual CFO (or us!) and draft a budget for how that revenue is spent on operational costs. With the 10% you’re accruing you have a nice little back-up fund for things like taxes, paying off debt or simply growing it as savings for future reinvestment.

 

 

The beautiful thing about a virtual CFO is their ability to adapt to your business needs without the full-time commitment of another executive. A virtual CFO shouldn’t simply be an accountant. A good virtual CFO should be a strategic partner enlisted to help smooth business operations and protect your assets so you can grow in a sustainable and, more importantly, profitable way.

Ready to add a strategic partner to guide your sustainable growth? Click here to book your free consultation today.

Now that we’re part of one of Chicago’s most prestigious CPA firms, Ostrow Reisin Berk & Abrams, Ltd, you’ll also find us online at www.orba.com.  With our ORBA colleagues, we’re positioned to offer you an expanded array of state-of-the-art services. 

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