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What is a VCFO and Does Your Business Need One?
Posted on 31st March 2017 in Business
Written by Freya Hughes
A Virtual Chief Financial Officer, or VCFO, can be thought of as your personal trainer. They’re there to help you accurately measure your performance, set goals and help you achieve them, and give you direction and support. Worry not, though, they won’t wake you up at 5am to run until you pass out. They’re more likely to give you a friendly phone call and catch up with the way your business is going. Although we can’t promise they won’t do both…
A VCFO is an outsourced accountant that helps multiple businesses strategise financially. It may be a single person or business entity, specialised in Management Accounting. As your cashflow is the heartbeat of your business, it’s vital to get the right person for you. VCFOs will look behind the numbers and make sure business owners understand their financial information. Their focus is strategising: setting targets, preparing data to take into the boardroom and help you to understand the financial side of your business.
More accountants than ever are looking to the future. If your accountant is still only helping you to look backwards in your business then please read on and share this blog with them. FUTRLI partners have changed the conversation with their clients so that the past, present and future are an equal core focus.
VCFO = Very Comforting For Owners
If you have a CIMA qualification then a VCFO probably isn’t for you but if that term alone is confusing, this is where they can step in. If the finances are not your strength, even if you are confident with the numbers, then work with someone who “has your back” when it comes to making strategic, financial decisions. This shouldn’t be about just the big things when you grow, it is about making sure you’re on the right track and not missing opportunities. Don’t forget the value in working with someone who is a specialist and has done this for other business in the same industry and/or size. Once your business does look to change gears, you’re going to need a deep, granular understanding of the financial state of your business and this is another time to call in a VCFO – some investors will have this resources a requirement for the business before they invest. The reason they are “Virtual” is because there is yet to be a full-time position available, of course, thanks to the cloud most will be remote to your business. A good VCFO will integrate with the business as a core member of your team even while working remotely.
The Training Plan
A VCFO will discuss your goals for the year with you and give you a snapshot of where you are now. Not knowing where you are going or when you’ll reach the finish line is stressful. Like a personal trainer, a VCFO will guide you through the unknown, making your path clear and predictable. If you were competing in a race, your trainer would set an optimum time goal. While you’re working together to train for this, it’s ultimately up to you to achieve it. You need to implement thorough training if you want a shot at reaching your goal – if you’re unprepared, you’ll miss the mark… and who knows if you’ll ever race again.
VCFOs are focused on helping your cash grow, and listen to how you want it to be achieved. They’ll also help you Forecast for the following 12 months. Calculating how to add value to your business, working to manage your costs and improve your margins, FUTRLI is software, a sounding board and advice all in one.
Is it worth it?
In short, yes! There’s a whole host of benefits to having a VCFO. Take a look below at some key reasons to consider hiring one:
- They’re affordable. You can use them as often or as little as you want. They work remotely so you’ll also save on desk space and office equipment
- Cloud-based data storage is secure and instantly accessible. This makes for a quick, precise and real-time experience
- They’ll bring more knowledge to the table than your average CFO. They’ve likely worked with a variety of businesses and industries, so have seen first hand what works
- They’re on-call and ready to help when you need it – and won’t bother you when you don’t need it!
You’re the expert when it comes to your business. While you can manage your figures, there are many much more pressing jobs on your to do list. A VCFO/Management Accountant is there to ask you the tough questions about your business. If there’s nobody looking at the risks you could be taking blindly, how do you know that the next payment won’t dismantle the framework of everything you’ve worked towards? Not having a voice in your ear to guide you through these obstacles could well see you fall – and not get back up. You’re accountable for your business – nobody else. There’s help at hand but it’s up to you if you take it.
“I found FUTRLI and chased them to work with them. As a Management Accountant, this it is exactly the sort of way you want to work with businesses. It’s a strategic “actionable” tool to attain a client’s financial objectives; surrounding but not limited to: Scenario Planning, Cash Flow Forecasting and KPI building. I work with businesses and accountants who want to look forwards, not backwards.”
– Ankur Gomes, Management Accountant at FUTRLI
Rather than using spreadsheets, our VCFOs are unlocking the power of FUTRLI to drive your business forward and raise investment on your behalf. Signing up will give you the option to speak with one of our team, who will get to know your business and share a Business Health Check with you so you know exactly where you stand. It’ll give you a better understanding of where your business is today and how you can maximise opportunities, or avoid any threats. Be prepared for questions – they’ll need to measure up before they can help execute your plan.
We can help to construct a budget and/or Forecast for the financial period. This budget would include a Profit & Loss, a Balance Sheet and Cashflow. Known as a 3-way financial forecast, this is the most effective way to understand the direction your business is taking. Our VCFOs can help source finance for your business and act as your advisor during the process. If you’re looking to expand, they’re right there to help with your planning. They’ll help you use FUTRLI as a strategic tool to attain your financial objectives. Updating your KPIs to Key Predictive Indicators will make you forward-thinking and open your eyes to what’s on the horizon – and how you can grab it with both hands, making your business as strong as it can be.