Virtual CFO or vCFO

Virtual CFO or vCFO means Virtual Chief Financial Officer. Virtual CFO is a new concept in India wherein small businesses get support of Virtual Chief Financial Officer at a fraction of cost of actual remuneration payable to full time CFO. This provides big benefit to small businesses since small business cannot afford an experienced and knowledgeable CFO on full time basis. It is a fact that in India many startups and small businesses fail within first 2-3 years of their commencement of operations. There are number of reasons for same like huge competition, non-profitable business model. Usually, a virtual CFO due to his finance background can provide useful insights into the business and try to achieve financial goals of the businesses.

The role of virtual CFO may change depending upon size of the organization and its future financial pyramid needs. Therefore, his role may be manifold like financial planning, managing financial risk of business, in small organization he may be expected to take responsibility of accuracy of accounts book, for big organization, they may be financial and strategic partner of the CEO along with optimization of resources and overall cost reduction of the company.

Advantage of virtual CFO to small business

  • Getting access to qualified and experienced finance professional at fraction of cost.
  • Getting guidance on measures to control expenditure and acquire capital with less cost.
  • Helpful in creating budgets and forecasts
  • Helpful in validating or stopping from taking wrong decisions relating to company.

Studying best trends and practices in market and helping in taking informed decision.

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Service Area of Virtual CFO

Some of the areas where Virtual CFO can be very helpful are as under:

  • Analysis of financial information and operational results and performance measurement.
  • Ensuring proper maintenance of books of accounts as per accounting standards and GAAPs
  • Taking steps for improving bottom line profitability
  • Strategic decision making process and planning
  • Making analysis of various risks associated with organization and what are the opportunities
  • Assessment of various systems which are in existence to determine if they are working efficiently. In case no system in place, providing guidance for development of same.
  • Creation of proper budget process in an organization.
  • Financial and cash flow projections
  • Identification of key performance indicator
  • Analysis of organizational structure and making necessary changes in same
  • Creation of growth plan of an organization
  • Assistance in staff recruitment, induction, training and replacements.
  • Making decisions relating to mergers and acquisition of company

Looking for best professional services at competitive price?

When the financial requirement of an organization is outsourced to finance professional having high degree of knowledge and skill in handling strategic and financial requirement of an organization similar to what a full time chief financial officer does for large organization, it is called as virtual CFO. A virtual CFO may be single individual or a firm or company.

A Virtual CFO provides strategic, value add services to a startup which cannot be provided by an accountant. They are qualified finance professionals with number of years of experience and expertise in handling financial matters.

A virtual CFO has mainly following responsibilities:

  • He has to provide all the services which a traditional CFO normally handles with only difference that instead of working full time, He can work part time and also from remote location.
  • He may make use of His skills and cloud technology to look after the well-being and financial healthof the business.
  • He should take part in all company strategic and decision making process and offer his guidance and financial insight.
  • He should provide support to back-office functions like managing accounts ledgers etc, depending on the need of the client.

Frankly speaking, currently there is no official qualification which is required to become virtual CFO. However, it is expected that service provider must have finance related university degree, professional accountancy qualification and lot’s of experience and expertise to fulfill role of virtual CFO. Normally, MBA finance, Chartered Accountants, Company Secretaries with years of experience are suitable for the job. In addition to same, in case virtual CFOs have qualified cloud CFO certification, it will be added advantage.

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