In a report by the Small Business Administration, nearly half of new businesses tend to fail in the initial five years of their incorporation, due to poor management of cash flow and lack of accurate financial planning. This propels the need for fractional CFO services.
Fractional virtual CFOs can fill the gaps in your financial insights through budget analysis, customized financial reporting, cash management, fundraising support, and exit planning.
Benefits of Choosing Virtual CFO Services
When you are a small business with limited resources, you need cost-effective solutions for finance-critical services. In the USA, the average annual salary for an in-house CFO can go up to 3,71,548 USD. It is an added overhead and a hefty price. But, you can control the costs of professional financial management through virtual CFOs. They offer many benefits like:
Every business has unique financial needs that require specific processes, reporting, and forecasting. Here, hiring a virtual service can make a lot of difference. They can customize the scope of work and skills, depending on your individual business needs.
The best advantage of a virtual CFO is the ability to grow with your company. Financial management and planning differ when a company grows from the revenue mark of 1 million USD to 10 million USD. So, you need a service that can help this transition without disrupting the ongoing operations.
When you hire virtual CFO services, you get access to a diverse pool of professionals. Using their experience and expertise, they help to resolve financial situations and issues in the organizations. Whatever your dilemma is, they can help to resolve the situation with the best possible solutions.
Does Your Business Need Virtual CFO Services?
The benefits of hiring a fractional CFO outweigh the costs involved in the process. As you can estimate, this virtual service can bring many advantages to the table and resolve the financial problems in your company.
However, it may not be the best fit for every organization. So, assess if your business really needs this service to strategize the finances and make viable financial plans. Here are the signs to look for:
When Expanding the Business
Things may be easy financially when you work on a small scale. But, as you add more clients, employees, contracts, or vendors, financial planning also needs a revamp. In these situations, a bookkeeper cannot provide the necessary financial solutions. Hiring a virtual professional is a good idea, especially if you have a limited hiring budget.
When Your finances Get Haywire
Almost every company goes through an unfavorable financial condition at some time. Here, it’s vital to take the right steps to manage your finances and ensure stability in growth. A virtual CFO can help with both.
When You Grow Fast
Fast growth may look suitable for a small company, but it brings financial complications as well. You need an experienced CFO to sail through this accelerated growth.
When You Don’t Have Financial Expertise
Informed decision making is the crux of an efficient business. The clarity in your finances is essential to ensure the same. When you lack a detailed understanding of finances to make crucial business decisions, hire a virtual fractional CFO to bring clarity to this process.
These are the situations when your business needs virtual CFO services in a fractional capacity.