4 Signs your Business needs a Virtual CFO


In today’s era, doing business is fiercely competitive. We’ve seen an explosion of new technologies, innovations,  unexpected turbulence in the form of global financial, political and health issues, globalisation and so-forth. With this comes inevitable complexities, greater risk, and more uncertainty. Financial strategy has become crucial for businesses to maintain a competitive advantage.

However, many businesses either lack the experience, expertise, or capital for this or find themselves attempting to balance all aspects of a business, subsequently hindering growth – which has led to the utilisation of Outsourced CFO Services.

Firstly, what is a Virtual CFO? 

A Virtual CFO,  also known as an Outsourced CFO, offers the same expertise as a traditional CFO, namely, strategic financial insight and manoeuvring that generates increased revenue, however a Virtual CFO is outsourced and works in a business on a part-time or ad-hoc basis.

As a result, businesses can reap the benefits of having better direction and strategy, without needing to pay a full-time CFO salary. This explains the growing popularity of Outsourced Virtual CFO Services, particularly in the start-up economy where such financial advice is crucial to business success, but funds to support this are limited.

Related: Why a Virtual CFO is a great choice if you are a Small to Medium Business?

Here are 4 Signs your Business should Hire an Outsourced CFO

1. You're spending too much time working "in" or "on" your business 

A necessary balance must be struck between working “on” and “in” your business to ensure longevity and success. It’s easy to get bogged down in the day-to-day demands of a business, leaving little time to work on the bigger picture and assess growth opportunities and strategic planning. 

Or perhaps you do spend time working on your finances, funding, and aligning business growth strategies, but your business may lack financial expertise meaning this is absorbing too much of your valuable time that would be better devoted to your specialist area, product, or service. Entrepreneurs often try to juggle all aspects of a business, which can sometimes end up being inefficient and time consuming.

Whether you find yourself compromising your business’s everyday function, or its growth opportunities, both can be harmful and might be an indication that your business could benefit from a Virtual CFO. 

An Outsourced CFO can help to create an environment that facilitates a healthy balance between working “on” and “in” your business. A Virtual CFO enables you optimise your time by allowing you to allocate more of it to your area of expertise, whilst they provide a fresh set of financial eyes helping to make informed strategic forecasts and decisions.

2. Your business is experiencing financial challenges 

An Outsourced CFO can oversee all your business’s financial functions. When a business is struggling, they provide expert skills to improve a business’s financial health. Specifically, a Virtual CFO could develop a three-to-five-year financial plan, deliver monthly consolidated reporting for reliable decision making, assess when and how much future capital should be raised, understand the value of the company at certain future points and understand key financial metrics for the industry.

3. You want to grow your business or you're experiencing rapid growth 

With business growth, comes inevitable increased risk, and a subsequent need to plan. An Outsourced CFO can develop all the financial tools needed when a business scales up. Specifically, they can ensure the financial infrastructure is fit for purpose, determine the most cost-effective tax structure, apply for multi-state registrations, utilise their networks to obtain equity and investments and carry out financial reporting and risk assessment.

Virtual CFOs understand that any start-up or SMB has business growth as their primary focus, and in many cases, they have been entrepreneurs themselves. The knowledge and expertise of an Outsourced CFO is essential in understanding how your business can achieve success, and how strategies can be executed in the most effective way.

Related: Most CEO's miss these 3 things when Scaling their Business

4. You don't have an Exit Plan 

When the time comes to prepare a business for sale and exit, it is imperative that business owners maximise the value of their business. An Outsourced CFO will provide commercial and strategic advice around positioning the business for an exit. Specifically, Virtual CFOs advise on strategic direction and objectives, market product positioning and pricing, corporate governance and ongoing reporting, business structure, domestic and international geographic expansion, staff and HR strategies and any other business critical matters.

A forward thinking Virtual CFO will ensure value leakage doesn’t occur by identifying and mitigating risks. They will take a multi-faceted approach at maximising the true value of your company by planning and implementing steps and processes over time to prepare your business for the best possible outcome. It is important to note that preparing your business for sale doesn’t happen overnight, rather it is a process that takes time and careful strategic planning, so you should consider engaging a virtual CFO a few years before you plan to sell.

Related: Selling your Business: Do's and Dont's

Tap into a team of highly skilled Virtual CFO's

Your business may require Outsourced CFO Services at any stage of its life cycle. Whether it be to facilitate a short-term capital raise, or long-term growth. Regardless of your business’s unique financial position, our Virtual CFO will tailor strategies, advice and planning to suit the demands of your business. A Virtual CFO will be a knowledgeable guide, saving you both time and money. 

Azure Group provide its Outsourced CFO Services through CFO Australia. To learn more, get in touch!

Have you noticed our #FridayExpertTips... here's one that relates to #Advisory

“A CFO is a senior position and an expensive resource, often out of reach for many SMB’s. If you need strategic expertise, hiring a part-time CFO on a flexible working arrangement allows you to benefit from their knowledge, skills and expert input until a permanent solution becomes more viable.”


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About Author

Azure Group
Azure Group

Azure Group is the leading Chartered Accounting, Business Advisory and Strategic Advisory firm supporting the growth & success of fast growing entrepreneurial businesses.

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