In these hugely volatile times, if you’re not thinking beyond tax planning to get strategic business advice, you’re doing yourself a disservice.
Your tax accountant helps you with tax planning & ATO compliance, but can't answer bigger questions around business strategy, growth plans, and maximising your bottom line.
Who do you turn to for advice on these matters? Not your mates? Not ChatGPT? You need an experienced financial strategist with skills across financial planning and management, stakeholder engagement, risk management, and beyond. Or a virtual CFO.
Below are just 3 examples of the kinds of questions that business owners should be asking CFOs (not tax accountants or bookkeepers) to gain the competitive edge:
How am I doing against my industry peers?
The biggest advantage of virtual or consulting CFOs is that they are not in your organisation’s bubble. As well as understanding your financial position, they have a good macro view of what is happening with other businesses.
Ask for industry benchmark data to understand how you're faring against your peers and set more realistic goals. Or stretch goals, if you're already in a good place! Your virtual CFO will be able to compare your business performance against industry averages and chalk out strategies to help.
Do you see any patterns that we need to watch for as we scale?
Not only will your consulting CFO review your current practices and identify quick wins around efficiencies and resource maximisation, they will also be able to spot patterns early and help you course correct and stop it from becoming a bigger headache down the line. This is dependent, of course, on how regular your consultations are.
Pro Tip: Ask your virtual CFO to help you understand why and how they come to the conclusions they do, so that you can watch out for those patterns in other areas or in the future.
Are we leveraging AI enough? Are there any risks?
We are now well and truly in the age of AI and there is ALWAYS a faster, cleverer way of doing business. Your consulting CFO will likely have great recommendations for software, workflows, and tools that boost efficiency and improve your numbers. So, make sure to ask them, but always consider the bigger picture.
Pro Tip: Already spoke about AI at your last meeting? Ask again because new AI and automation tools are launching all the time, each one more sophisticated than the last.
How to get the most value from your Virtual CFO
Schedule in regular meetings for better business outcomes
You can get away with seeing your tax accountant once a year at tax time. But the world of business moves at the speed of light and if you’re only getting financial business advice once a year, you’re setting yourself up to fail.
We recommend seeing your consultant CFO regularly, possibly every quarter, so you can continue to charge ahead even when variables change constantly.
A skilled virtual CFO can ensure that ‘agility’ becomes a key characteristic of your business strategy.
Treat your fractional CFO like a coach and confidant
Your virtual CFO should be more than just your ‘numbers guy’. Consider them your business and finance coach (working alongside your tax accountant.)
Make a list of business matters that keep you up at night and unpack them one by one. Get into the nuance: ask them to help you see it all. The good. Bad. And ugly.
Ask them the kinds of questions we’ve discussed above. In fact, run your next big business idea past them: they’ll be able to flag any risks straightaway. They’ll also help you get to ‘next steps’ much quicker than if you kept mulling it over in your own head.
They can also help you see what your near and long-term strategies mean for your stakeholder groups: whether that’s the bank, the board, your vendors, or others.
Choose your virtual CFO well
If you’re going to invest time and effort into this relationship, you want to choose your CFO well.
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You want to look beyond tax planning and think more in terms of a trusted business advisor.
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Someone who has the depth of knowledge and industry experience.
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Someone backed by a respected accounting practice that has stood the test of time.
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You also want someone who is well connected with the industry.
Final thoughts: How consulting CFOs can help you scale your business
Competition, in business today, is cut-throat and the forces at play are ever-changing. While artificial intelligence ensures that information is everywhere, personalised business advice from a skilled professional with real-life experience is hard to come by.
As someone who understands not only your financial position, but the business of business more broadly, regular consultations with your virtual CFO can be your biggest strategic advantage right now.
Remember: pick the right CFO and ask them all the right questions.
Related
Virtual CFO vs. In-house CFO: Which is Right for Your Business?
This article is intended to provide general information only and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances and assumptions, and its accuracy may be affected by changes in laws, regulations or market conditions. Accordingly, neither Azure Group Pty Ltd, nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.
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