Imagine having the skills and experience of a CFO in your pocket, ready to provide seasoned financial leadership. For many Denver businesses, a full-time Chief Financial Officer (CFO) is far more than what is currently needed. In addition, the cost of hiring, paying benefits and managing a senior financial professional is more than most can afford. Despite this, there are many that can benefit from having a part-time or as-needed CFO. Retaining the services of a Virtual CFO (vCFO) may be the better move. They can assist with banking relationships, financial meetings, budgeting, cash flow management, forecasting, and can assist with strategic financial planning. There are many benefits to hiring a vCFO for Denver companies. To help clients, prospects, and others, Hanson & Co. has provided a summary of the key details below.
What is a Virtual CFO?
A Virtual CFO (Chief Financial Officer) is a service provided by finance professionals who offer high-level financial strategy, systems analysis and design, and operational optimizations remotely. Unlike a traditional CFO, a virtual CFO works remotely and often part-time, providing flexible and cost-effective financial expertise and leadership for businesses, small and medium-sized enterprises (SMEs) that may not require or cannot afford a full-time CFO.
What are the Benefits of Hiring a vCFO?
It can be a cost-effective, on-demand, scalable solution for businesses looking for access to deep financial expertise. Instead of paying for a full-time employee, businesses can use a vCFO on a project basis or establish an agreed monthly or annual engagement. While some vCFOs have a particular niche, others have a wide range of experience and can help businesses do everything from planning for tax season to forecasting future business trends. They can serve as consultants to grow or maintain a business and help their clients make wise financial decisions based on their current situation.
When companies hire a full-time CFO, they’re available to the business 40 hours per week, but this often means more presence than a business may need. vCFOs can scale their offerings to meet the growing needs of a business and back off in quieter moments. Some also offer the flexibility of working outside of normal office hours, but this all depends on the details of the agreement.
What Kind of Work Do Virtual CFOs Handle?
Experienced vCFOs can tackle several financial projects touching virtually every aspect of the company. This includes managing banking relationships, conducting financial meetings, budgeting, cash flow management, forecasting, and can assist with strategic financial planning. everything from strategic planning to operations work, to reporting and analysis projects.
- Strategic Financial Planning – vCFOs can create accurate financial models to forecast and predict future business performance. These models can also help businesses understand their cash flow needs and pinpoint potential opportunities and risks before they develop.
Businesses that are at a crossroads can work with a vCFO to perform a business valuation, which can be helpful during mergers & acquisitions, succession planning, or when companies are trying to gain funding and support for a future expansion.
Every M&A (mergers & acquisitions) transaction can feel unique, but vCFOs have seen common patterns emerge that allow them to provide valuable financial guidance and analysis.
- Financial Operations – Understanding budgets, cash flow, and tax strategies that can make businesses more efficient and effective with their budgets can all be areas where vCFOs can lend a hand. A skilled vCFO can create and monitor budgets, take note of variances, and recommend corrective action as necessary.
Businesses that are looking to optimize their cash flow can get new strategies from vCFOs. They can also review accounting systems and tax strategies, recommending improvements and outlining necessary compliance measures.
- Reporting & Analysis – Data without action won’t move a company forward, but a vCFO can close the loop by creating monthly and annual financial statements, as well as analyzing key metrics and providing valuable insights. Reporting on financial ratios, for example, can help businesses see their current financial health and performance. A cost analysis can uncover important cost-saving measures. The more visible financial data is, the easier for businesses to act.
Is a Virtual CFO Right for Your Business?
Many Denver companies are looking for financial guidance that fits within their budget and could likely benefit from a vCFO. Services tend to be well-suited for businesses that don’t have a need for full-time help but may be looking for general financial consulting or assistance with specific financial tasks. As businesses become more complex, there may be more of a need for in-house help, but until then, vCFOs can fill many different financial gaps in a business.
There are many reasons why a Colorado business should consider hiring a Virtual CFO to assist the business. If you have questions about the information outlined above or need assistance with a strategic financial issue, Hanson & Co can help. For additional information call 303-388-1010 or click here to contact us. We look forward to speaking with you soon.