With the advent of virtual CFOs, CFO services are now accessible to even small and medium-scale businesses. Virtual CFOs are making expert and professional services accessible to all businesses. Further, their roles are not limited to the conventional CFOs. The reason behind the growth of virtual CFO services in India is that they are affordable, flexible and businesses only have to pay for the services that they avail. It’s like outsourcing the CFO services. But what are the types of virtual CFO services that businesses can avail? Let’s find out!
Different Virtual CFO Services for Businesses and Startups
Well, virtual CFO services are not only limited to managing the finances of a business and maintaining its financial health. One can expect a complete business solution from virtual CFOs. Following are some of the different services of virtual CFOs that businesses can avail of:
1.Handling Bookkeeping and Reporting
Virtual CFOs present entire bookkeeping solutions to businesses. It ensures up-to-date accounting of the business transactions and timely reconciliations in order to keep your financial statements and records clean, tidy and reconciled. Further, businesses can outsource accounting services and can get quarterly, half-yearly as well as yearly reports to know what’s exactly going on in the business.
2.Assisting in Fundraising
This is one of the best virtual CFO services and also one of the most important ones. The startup culture is booming. Startups always face two choices when it comes to scaling – either to bootstrap or to go for external investments i.e., fundraising. Bootstrapping essentially means growing the business using the profits generated from the business. However, one of the key drawbacks of this strategy is that it might take a lot more time for the business to scale.
Another strategy is to raise external funds from investors. This can be from venture capitalists, angel investors etc. The idea is to use the funds to scale at a rapid pace. This is where CFO services for startups become important. Virtual CFOs for startups through their network built over the years provide fundraising services whereby they connect the startups with the investors. Further, they also assist in the preparation of documents, presentations, pitch decks etc. in order to help businesses secure funding.
3.Ensuring Timely Compliances
Multiple laws apply to a business that requires periodical compliance. This includes income tax, GST, MCA etc. While compliances largely depend upon the constitution of business, businesses need to ensure timely compliance in order to avoid penal consequences. Virtual CFO services in India ensure timely and accurate compliance for your business. This includes periodical filing of income tax returns, audits, disclosures etc.
4.Sound Financial Management
This is one of the core services of virtual CFOs. For a business to grow and prosper, it is important that it makes sound financial decisions. The CFOs are primarily responsible to oversee the financial health of the business and make informed decisions. Optimising the financial processes is one of the ways through which CFOs maintain the financial health of a business. Financial management for a business can include fund management, receivable management, treasury management, cash flow management, management of payables etc.
5.Routine Budgeting and Controlling
Usually, in small and medium-sized businesses, budgeting and controlling are non-existent. This is where virtual CFO services in India can be most useful for any business. In the budgetary exercise, the expenses are bifurcated under different heads and a budget is set for each head that acts as a benchmark. The budget may depend upon past figures adjusted for inflation or as per the industry standards. In any case, it is important to set a realistic budget. Then the actuals are compared to the budget to determine whether the business was able to meet its target. If it fails to do so, then control measures are adopted in the business.
6.Debt Financing
Businesses are often in need of financing. This is different from the investments and fundraising that we discussed above in the sense that financing here means raising debt. It can be from a bank or any other financial institution. Businesses might need financing either for a project, meeting working capital expenses or as simple as a term loan. In any case, virtual CFOs provide financing services to businesses to ensure that capital is not an obstacle to their growth. From preparing the project reports, credit monitoring analysis reports, gathering and preparing documents to identify the best lender – virtual CFOs take care of all.
7.Risk Assessment & Mitigation
Risk assessment is another crucial type of virtual CFO services. Business is prone to multiple risks be it credit risk, political risk, financial risk, compliance risk, IT risk etc. Such risks can jeopardise the business operations. Therefore, it is important to proactively assess such risk and create a risk mitigation plan. This ensures smooth running of business. Virtual CFOs can help identify significant risks for your business and help craft proper plans to mitigate those risks.
8.Auxiliary CFO Services
Apart from the above services, virtual CFO also provides many other services. This can include information technology (IT) services, strategic hiring, crafting future growth plans, financial analysis, improving profitability etc. All these are equally important for the proper functioning of the organisation.
Is Hiring Virtual CFOs Services the Right Move?
From the above, it can be concluded that virtual CFOs are a one-stop for complete business solutions. They are not only the financial executives for your business but a partner in your business growth. Small and medium scale businesses go for different virtual CFO services as they not only get all the services in one place but hiring a virtual CFO is way more affordable than an in-house CFO. If you are also looking to expand your business, then it’s time you should hire a virtual CFO with eAuditor Office
