VCFO or Virtual Chief Financial Officer. I would describe this person as an adviser who can give you the peace of mind that all your finance needs are taken care of.
A good VCFO is someone with a strong background in finance, accounting, tax and cashflow planning. A great VCFO is someone who not only has these skills but also has a strong business & commercial background and access to a team of specialists in the areas of banking, legal and strategic planning.
Who can be a VCFO
Anyone that is external to your business that has the experience, expertise and execution skills required to complete and advise on your various business and finance management needs. A lot of the time this is someone like your accountant or trusted adviser.
What I believe makes a great VCFO is someone that is backed by a team of specialist advisers. So through your VCFO, in essence, you can get access to the whole firms knowledge base and resources. What I mean by this is that you may have a question regarding your family self-managed super fund, as this is a specialist area your VCFO will be able to get one of their associates to advise you.
What are the advantages of VCFO
- Lower cost then employing in-house CFO
- Availability to answer queries almost 24/7
- Broader knowledge base with associates who will have specialist knowledge
- Commcercial experience in running a business
- Making you accountable for your business goals
What are the disadvantages of VCFO
So what does all of this mean?
We all know how time consuming running a business is and how long many of the finance tasks take if its not a strength of yours. As most of these tasks are completed on a more adhoc basis, leaving them to a VCFO means the business owner has a lot more time to concentrate on winning new work and running the business….and putting out the fires… we know there are always fires to put out!
A lot of the time business owners are great at what they do but their knowledge of business management, tax, accounting and finance is normally just out of reach, and who can blame them. By having a VCFO it means that you have access to an adviser that will be your go-to-person to take care of the financial areas you need taken care of.
Besides being a great adviser that understands your business goals and aspirations, your VCFO can help you understand a Profit and Loss, Balance Sheet, Cashflow and what is required for the Tax Office or your bank.
Going one step further a great VCFO will use the goals you have for your business to generate a number of key performance indicators (KPI) for your business and assist with tracking them and discussing them with you. But more importantly a great VCFO will make you accountable to those KPI’s and your business goals.
If you feel you need more time in your business or feel you could acheive a better bottom line by having a VCFO then ask around, ask your accountant or advisers whether they have the capacity to be your VCFO….and if you get stuck connect with me and over a coffee I’ll see if I can help.
Don’t forget your VCFO can free your time up to do what you do best. So why not!