Virtual CFOs are on the rise, and for good reason

Having access to a CFO has an obvious appeal. Yet how many small business owners can manage to pay the salary required to engage a reputable one?

This is why many business owners rely on outsourcing a CFO. You can get the advice of a CFO-level financial expert without being landed with the burden of paying a CFO-level salary. And now, combined with the rising interest in Virtual CFOs, new technology is bringing this service to the doorstep of a wider range of Australian businesses. In an increasingly complex business world, the need for the flexibility and accessibility of high-level financial advice is more important than ever.

Yet it still appears to be an unnecessary expense. What value does such a service add that exceeds that provided by an accountant or business advisor, and how does this explain a sudden trend in hiring virtual CFO services in Australia?

Rise and Rise of CFO Outsourcing

Traditionally, you could argue that every business needs an accountant, but not every business needs a Virtual CFO. Your accountant crunches the numbers and makes sure you stay on top of the regular tax and compliance issues. In effect, they maintain your business finances. Yet now more than ever, there is an expectation that a small business needs not only to survive by making sure they manage their profit and loss, cash flow, and statements, but thrive by planning for growth. And such business growth hangs on the right business advice. Large businesses access advisory services by investing a considerable sum in a CFO-lead team; now, small businesses can hire a CFO for a specific task and gain access to financial advice and strategy that goes well beyond mere number crunching.

Technology has made access to CFO outsourcing more simple. Accounting software, data management tools, and remote work technology give you the chance to connect to CFOs from numerous global locations while allowing your Virtual CFO to access up-to-date, accurate, and real-time data about your finances. This makes for an efficient partnership, and with CFO outsourcing efficiency is key. You can afford CFO services precisely because you hire them for specific advice within a limited scope. This new tech gives you the chance to do this by improving real-time communication and financial data flow between you and your outsourced CFO.

It is little wonder then that the hiring of Virtual CFOs is on the rise in Australia. Australian accountants are more inclined to offer this outsourced CFO service than accountants overseas. This points to an overall increase in the trend among accountants of offering business advisory services rather than sticking only to traditional bookkeeping-focused accounting.

A Financial Advantage over Mere Bookkeeping

A CFO-level business advisor can raise the horizons of your business, but there is more than a desire for growth behind this trend. Finance, reporting, and compliance in Australia is becoming increasingly complex. Your accountant may not have the expertise and foresight to help you navigate this complexity in the long-term. Hence, outsourcing a CFO for specific advice can not only boost your business, it can also protect your finances against potential risks that may not be noticed by your accountant.

This strikes at the core differentiation between Virtual CFOs and traditional accounting services. While the relationship between you and your accountant is transactional, CFO outsourcing goes beyond this minimal, often yearly bookkeeping interaction. Your books are not just kept in order; they become the basis for a vision for your company’s future capacity. CFOs have the capacity to interpret your numbers and business metrics in real-time and present this data in the form of consistent feedback that measures the financial reality of your business. No longer do you need to rely on strategy that is untested and generalised; you can accurately project your business’ financial capabilities based on the insight a CFO brings. This means you are able to envision the future of your business in a much more realistic manner. The goals and objectives made by you and your management team can be validated, analysed to a financial measurement, and measured over time. This not only helps you plan and vision. It ensures your business is grounded in financial reality.

It is no wonder larger businesses rely on CFOs and pay out the large salaries demanded by them. With Virtual CFOs, this cost is reduced to a monthly or twice monthly meeting within a specific scope. Your outsourced CFO will then turn to the tax and accounting experts he or she needs to create an accurate financial picture of your company. And, as more and more firms in Australia seek to utilise new communication technology to offer this service, and more and more businesses are heeding business advice from Virtual CFOs that goes beyond mere bookkeeping, will your business be left behind if it does not consider outsourcing a CFO?

Important Disclaimer: Readers should not act solely on the basis of the material on this page. Items herein are general comments only and do not constitute or convey advice. Legislation and proposals of legislation are also subject to constant change. We therefore recommend that formal advice be sought before acting in any of the areas. This news article is issued as a guide to the readers. Calibre Business Advisory Pty Ltd and its associated entities disclaims any losses that may be incurred as a result of the reader undertaking any action based on this article.