What is a virtual CFO?
A Chief Financial Officer (CFO) is a senior executive responsible for managing the financial health of their company. The role usually includes financial analysis, tracking cashflow, and managing all aspects of the company’s financial matters.
A virtual CFO is a finance professional who performs a CFO's duties on a remote, part-time basis, typically as a contractor. A virtual CFO’s duties might look very similar to a full-time CFO, including tracking the financial health of a business, offering guidance on financial decisions and providing accounting services.
The virtual CFO might also work with multiple companies, so they can earn an income similar to that of a full-time CFO.
What does a virtual CFO do?
Bookkeeping and payroll management
As a business grows, it becomes increasingly difficult for one person to oversee all finances. Outsourcing bookkeeping and payroll processes to a virtual CFO is one way small businesses can manage new demands.
Read this next: 7 key benefits of payroll management
Strategic financial planning
A virtual CFO can review a business’ financials and determine the best course of action. High-level strategy is often one of the main responsibilities of a CFO, virtual or otherwise.
Budgeting and forecasting
Creating a solid financial forecast can be tough, requiring knowledge of how to interpret financial statements and analyse markets. A virtual CFO can be a huge help for new businesses in this department.
Read this next: Budget vs. forecast: 3 key differences
Financial reporting and analysis
The ability to review financial reports and extract useful analysis from them is one that often comes with experience. Being able to outsource this vital task is a major benefit of using a virtual CFO.
Cashflow management
In addition to knowing how much revenue they’re bringing in, small businesses need to keep expenses balanced. A virtual CFO can help manage cashflow and keep a business profitable.
Devise debt-reduction strategies
The early stages of starting a business in Australia can result in a lot of debt. A virtual CFO can analyse this debt and implement a plan to pay it down quickly, putting the business in a stronger financial position.
Recommend new software
A virtual CFO can use their experience to recommend the best software stack for a small business. The software a company chooses makes a huge difference in efficiency, productivity and output.
What's driving the demand for virtual CFO services?
Accounting has become more automated
Software can make accounting and financial tasks easier and even automate them entirely. This makes deep accounting insights and the tracking of large amounts of data more accessible. While it’s not necessary to manually track every aspect of a company’s finances, businesses may still need a CFO’s input on high-level financial decisions.
Read this next: 7 accounting trends to watch (2023 edition)
Companies are opting for a leaner workforce
Many companies have tighter operating budgets and a greater need to stay nimble than in the past. Hiring a virtual CFO contractor instead of a full-time CFO can help companies minimise labour and benefits costs.
How to develop a virtual CFO service offering
Invest in the right tools
If you’d like to start your own virtual CFO consultancy, one of the first things you should do is invest in the right software. Cloud accounting software allows you to access your clients’ data from anywhere. The right platform will offer powerful automation, analytics and forecasting features to help you better serve your customers (and your own business).
Define your offering
Next, decide what services you’ll offer as a virtual CFO. For example, you might want to provide a full suite of financial services, from basic bookkeeping tasks to high-level planning and strategy. On the other hand, you might want to skip the basic services and focus on strategic consulting. Or, you may offer custom packages for each client.
Inform existing clients
Finally, let your existing clients know about your new offering. They may not be aware that you offer more than standard bookkeeping and tax services, so it’s important to educate them about the higher-level services you provide.
Make better decisions with MYOB
Whether you’re looking to connect with a virtual CFO, or you’re an accountant who wants to offer CFO services, you can benefit from MYOB’s software.
Our Partner Program is ideal for finance professionals that want to expand their client base, and our accounting features help small businesses manage their day-to-day finances.
Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.