Why would you need a “virtual CFO”?

The idea of this CFO is brand new. As a result, small businesses may now afford CFO support they otherwise would not have had. The expense of a packed CFO is prohibitive for many small firms, but by hiring a Virtual CFO, they have access to a seasoned financial specialist. Typically, this CFO will provide the following services:

All the responsibilities of a regular CFO, but on a portion basis and remotely. In most cases, cloud technology is used to know the financial health or well-being of the organisation. Assist with all aspects of financial decision-making for the business. By the client’s requirements, perform back-office tasks such as managing accounts ledgers. A virtual CFO solution made possible by the cloud.

The first step to offering value-added services like this CFO is utilising cloud technology. CFO services can benefit from several cloud-based advantages, including:

Sharing data between cloud solutions makes it simple to sync and transfer information between various systems.

Cloud accounting software provides you with real-time reporting and analytics. Insights about a client’s financial health can be gained by using these tools.

Cloud accountancy and business management systems can be used at any time, from any location, thanks to the internet. You can now provide online CFO solutions to your clients from any site.

One way that the cloud could save you both time and money is in the process of reconciling your bank accounts. Reconciliation in the old way takes a long time. Accounting software can accomplish it considerably faster by linking to online banks or credit card institutions in the cloud. Bank transactions are recorded in the accounting system and related to the relevant marketing each day. If it’s a match, all the user does is click “confirm.”

Using cloud accounting to automate a low-value process frees you up to work on a more valuable company.

Research thoroughly before deciding on cloud accounting software. Check out our guide to shifting your accounting practice to the cloud can help you decide.

Small-business owners will appreciate these benefits

For a small firm, having an online CFO is a huge advantage. It’s unlikely that they’ll ever hire a full-time CFO because they can’t afford it.

Many small enterprises fail within the first three years; thus, this is an issue. Reasons include a lack of differentiation from the competition and an inability to develop a viable business concept. They could stay on track with their financial objectives and reality if they had an online CFO.

Digital CFOs are a more cost-effective alternative to hiring full-time CFOs for small businesses because:

Developing financial plans and projections

Emphasising market patterns might help identify areas of excessive spending

Ascertaining the economic impact of company actions and encouraging or discouraging them

To succeed, business owners sometimes require skills that the large bulk of them lack

You can give your clients an online CFO service that is highly beneficial by combining your practice experience with cloud-based accounting systems, mobile technology, and current data analytics.

What’s behind the rise of digital CFO roles?

Until now, you may have never heard of it. Because of changes in the accounting industry, services like Online CFO are becoming increasingly popular.

Increased competition as well as technological advancements

The provision of tax compliance and preparation services has become commonplace. Traditional services are becoming less valuable due to the automation of many of their essential activities. Small enterprises might outsource accounting and other non-core services to save money and hire better employees.

Real-time cash flow visibility software that aids in sound business decisions

Firms are responding to these shifts by increasing and diversifying the services they provide. There is still a market for essential services like safety, financial reporting, and tax returns. The basic minimum package that a firm will deliver to a new client should not include them.

Profitable companies will soon generate the majority of their revenue from financial intelligence, analysis, and other services that directly impact the success of small businesses.

Adding a virtual CFO to your company

There are many distinct kinds of firms in the field of public accounting. These can be small businesses with just one person or major enterprises with outsourced divisions that employ a significant number of people.

Only a general estimate of the profession is depicted in this graphic

As you progress from left to right, the importance of your services grows for your client’s business. Automated and commoditised services from the far left have been rendered obsolete.

For example, services that assist your clients in operating their businesses more effectively should be on the figure’s right. Your revenue should rise if you provide services that your customers find valuable.

Small businesses may not be expected to be unaware that their auditor or bookkeeper is capable more than simply providing compliance and tax services. Because of this, it’s crucial to describe what you can do for the customers. Even if some customers only want the basics, you can add value by delivering helpful insights over time. The benefit of working for you as an advisor will become apparent as the customer gets to know or trust you.

Don’t forget to offer your products and services in various packages. As a result, the terms and conditions are always crystal apparent, allowing your customers to move up if necessary.

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