Five indicators it’s time to hire a virtual CFO

Five indicators it’s time to hire a virtual CFO

04 August 2023

After reaching a certain point, business owners are often faced with challenges when it comes to sustaining and continuing their growth trajectory. What was once a smooth upward climb can suddenly become frustrating with numerous obstacles such as cash flow management, strategic planning, and complex financial decisions getting in the way. Adding to the frustration, small businesses require the financial expertise of a Chief Financial Officer (CFO) but often lack the resources to employ one full time. This is where a virtual CFO can be a cost-effective alternative to access the higher level of financial acumen and expertise required. 

AR & B Advisors Director Adam Passmore says ‘A virtual CFO is an outsourced option for people missing a finance function within their business. If you can’t afford a CFO inhouse or your business isn’t at the stage of growth to require hiring one, then this is a great alternative to access the expertise you need.’   

Adam recommends assessing your business and financial goals and reflecting on what may be holding your business back. ‘You need to re-evaluate the areas in which you are investing your time, and whether getting help from an expert in their field will benefit you and your business,’ he states.   

Adam’s top 5 indicators you may need to hire a virtual CFO: 

  1. You have an ambition to grow 
    If you have a strong desire to grow your business but are having trouble navigating the hurdles in your way, then this could be a sign to hire a virtual CFO. This level of growth requires an advanced level of oversight. A virtual CFO could help monitor the numbers, set financial goals, identify growth opportunities, and formulate strategies to help you reach them.  

  2. Lack of financial acumen 
    Although you have successfully built your business, you may not possess a strong background in finance. Many business owners have a limited understanding of financial concepts and struggle to interpret their financial reports. Without a solid grasp on your financials, you may find it challenging to make informed decisions on investments, pricing strategies and budgeting. A virtual CFO could help to bridge this gap, providing knowledge and guidance on all financial matters.  

  3. Lack of access to information 
    Inadequate financial reporting systems within a business can limit your access to reliable and up-to-date financial data. The flow-on impact of this will hinder your ability to make informed business decisions. Some businesses may have a lack of integration between their different systems, leading to errors in reporting information, making it difficult to know your true financial position. A virtual CFO can streamline systems, establish robust financial reports, and develop financial processes to provide valuable insights and guide the business owner on strategies to propel the business forward. 

  4. Lack of quality data 
    You may have a bookkeeper, finance officer or accountant to help you keep your business finances on track but generally they are focused on the day-to-day financial tasks. Using sales records, invoices, and expense reports, they can provide an overview of how the business is tracking. They may not have specific processes in place to validate the accuracy of the data, instead they would assume the data is accurate and complete. A virtual CFO can work with your internal team or accountant to ensure data integrity, clean up existing data and establish processes for accurate and reliable reporting.  

  5. Frustration in achieving business growth 
    If you are frustrated because your business growth has begun to plateau, it may be time to call in a virtual CFO. The role of the virtual CFO is to provide a higher level of analysis and understanding to the business owner. You may feel that you are doing all that you can, but a virtual CFO will offer a fresh perspective and identify the financial levers that you need to be pulling to propel your growth forward.  

Adam believes engaging a virtual CFO will give you benefits that are pivotal in achieving your financial goals. ‘A virtual CFO is perfect for SMEs that haven’t quite grown large enough to hire an internal CFO. Over a period of time, our goal is to help them grow the business to reach a size in which it makes sense to hire a full-time CFO,’ said Adam. 

At AR & B Advisors, we can offer your business the benefits of a professional and reliable virtual CFO service as part of our cost-effective business bundles. To find out more, speak with one of our Advisors today to understand how we can fit your business needs.  

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