Virtual CFOs (VCFOs) have become increasingly popular among small businesses, thanks to their ability to deliver high-level financial expertise without the full-time cost of an in-house equivalent. While a fledgling business or startup certainly benefits from the flexibility of this fractional model, a high percentage of more established SMEs also experience distinct benefits from the services of a VCFO.

Many successful small to medium firms still have a founder or co-founder central to the day-to-day business. The VCFO’s objectivity and perspective can improve a founder’s tracking of personal and company goals, including cash flow management, financial forecasting and raising capital.

Data-driven insights and risk management strategies can provide much-needed perspective regarding the true potential of the business and the personal risk so often borne by founders to support it.

Here are further examples of how a VCFO goes beyond “just” the financials to help small businesses and their founders thrive:

Founder Support

A good VCFO has worked with many founders before. They’re adept at understanding the ambitions of the founders and translating this into personal goals and company goals, including:

• Advice on entity setup (personal and corporate entities)
• Developing or supporting founders through growing the business to exit transactions or succession plans
• Founder salary expectations – including what’s practical or sustainable from tax and business perspectives
• Building a roadmap of personal financial considerations, and reducing personal financial exposure related to guarantees

Optimising Commercial Strategy

A founder is often so involved in a business that they can lose commercial perspective, potentially leading to unattended strategic weaknesses, lost revenue, or ongoing risk exposure.

VCFOs will help founders make smart and sustainable commercial decisions that support the growth and scale of their company. This includes:

• Management reporting, including actuals vs forecasts to maximise accountability among management
• Financial planning and analytics to “see around corners”
• Revenue models and streams
• Pricing strategies, including simplified sales functions
• Employee Share Schemes
• Geographical and even international expansion

Strategy Development & Support 

With a strong focus on data, a VCFO provides small business founders with critical support on the best strategy, governance, and decision-making aligned with strategic financial, company, and personal goals. 

Relevant strategy development support includes:

• Board reporting, and advice on when a board is necessary for growth
• Financial reporting, including comparing budget forecasts and actuals, and uncovering trends or sources of poor performance
• Corporate strategy, including growth and expansion planning
• Capital strategy and investor relations
• Risk management, relevant governance and compliance

Performance Management 

A VCFO will prioritise healthy financials for growth and traction. However, they can also bring a ‘people’ focus to their role to improve motivation and accountability and support sustainable small business growth and performance. This includes:

• An EOFY strategic financial management meeting to discuss company performance and review the new financial year's most important milestones and objectives.
• Performance dashboards that track key metrics for monthly review for the founder and management teams.
• Motivating teams by explaining ‘how we make money’, demonstrating to each employee how their role and KPIs or metrics contribute to the business's financial success.

Operational Performance

The VCFO offers the SME founder significant time, confidence, and efficiency by overseeing activities that streamline day-to-day financial operations with clean and reliable data. These activities may include:

• Bookkeeping
• Payroll & Superannuation
• Chart of accounts
• Banking
• Cashflow management

At Prime Financial Group, we offer highly experienced VCFO support on flexible terms. We will take responsibility for your business numbers and financial challenges so you can focus on driving your business. Contact our team today at enquiry@primefinancial.com.au to discuss your financial challenges and see how we can best support your business.