Connections for Success

 

02.15.19

Three Signs Your Company Needs a Virtual CFO
Chris Arndt

If you are reading this article, chances are you have got a few things on your plate right now. It is likely that you are feeling overwhelmed or even confused by your finances, perhaps you are growing faster than you anticipated and are worried that growth is not sustainable. But, you are not entirely convinced that you need a full-time CFO.

These are the three signs that your company needs a virtual CFO.

  1. Time is an Elusive, Mythical Sort of Thing, Like a Unicorn or Centaur
    You are the CEO or COO and time is money. You do not have time to read our article about the accounting terms every entrepreneur should know, nor do you have time to dive deep on how to read financial reports. This is when you should bring in an expert to look after all your finances. In fact, a good virtual CFO should be able to provide financial strategy, projections, modeling and investor reports. Plus, we are in the business of making accounting processes more efficient. So, even if you have items that you do still want to keep your hands on, we guarantee that they will operate faster than they did before.

    Quick Time-Saving Tip

    Move your accounting to the cloud for anytime, anywhere access. Many cloud solutions also have a phone app that lets you see real-time dashboards.

  2. You Keep Talking to QuickBooks Like it is Siri
    When you need a real person to give sound financial advice about things like pricing strategies, inventory turnover, or equity and debt health, it is time to hire a virtual CFO. We might work remotely, but we are real people looking after your books. QuickBooks cannot tell you when to scale at the appropriate time. You need monthly reports that measure and identify key growth drivers to support your business plan. When a company has outgrown QuickBooks, it simply will not provide you with the in-depth financial information you need. A virtual CFO is your on-demand answer.

    Quick Financial Analysis Tip

    For a better financial breakdown, be sure to use cohort analysis whenever possible so that you can isolate the main drivers behind an improving key performance indicator (KPI).

  3. Cash is Exactly What it Sounds Like…Cash, Right?
    Cash is not simply the money your business makes. Your free cash flow could either be an enticing carrot or a warning sign for investors, depending on whether you are operating in the black or red. If you are consistently running into cash flow issues or do not know what to do with any surplus of cash, it is pretty clear that you should hire experts to come in and look after your financial health. A virtual CFO will monitor your cash flow, help manage your assets, implement a strict accounts receivable cycle and mitigate your risks with internal controls.

Quick Cash Management Tip

Take a small portion, 10%, of your monthly revenue and set it aside. Take the majority, or other 90%, and sit down with your virtual CFO to draft a budget for how that revenue is spent on operational costs. With the 10% that you are accruing, you have a nice back-up fund for things like taxes, paying off debt or simply growing it as savings for future reinvestment.

The beautiful thing about a virtual CFO is their ability to adapt to your business needs without the full-time commitment of another executive. A virtual CFO should not simply be an accountant. A good virtual CFO should be a strategic partner enlisted to help smooth business operations and protect your assets, so you can grow in a sustainable, profitable way.

Ready to add a strategic partner to guide your sustainable growth? Click here to book your free consultation today.

For more information, contact Chris Arndt at carndt@orba.com or 312.670.6235. Click here to learn more about our Cloud CFO Services. 

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