Tags: Outsourced CFO, Outsourced CFO Services, Role of CFO, Virtual CFO, Virtual CFO Services
It’s no secret that the COVID-19 pandemic has drastically reshaped the way that most companies operate. Working remotely is now a norm— even for businesses that never established it as an option in the past.
This is even true for executives. In fact, hiring someone like a virtual CFO comes with many benefits. But, it’s important to know exactly what they’ll be doing while working for you.
Not sure where to start? Don’t worry, we’ve got you covered.
Let’s take a look at everything you need to know about CFO responsibilities.
1. Sustain Your Company’s Performance
One of the most important roles that a virtual CFO has for the company they work for is ensuring that your company’s performance is sustained. If possible, they should also take measures to gradually increase the company’s performance over time.
Doing so will allow the business to scale sooner, which brings along a large handful of new opportunities.
Your virtual CFO will do all that they can in order to establish notable financial stability. This process involves managing finances, determining the best way to allocate funds, etc.
This service is particularly useful for existing companies that can benefit from increased financial optimization and new companies that need guidance as they enter the industry.
2. Risk Management
There’s a reason CFOs are so important to the overall health of the company— their expertise can allow entrepreneurs to avoid common pitfalls that they would otherwise suffer from.
For instance, a virtual CFO is able to inform you of what investments are wise to make and which you would stay away from. They’ll also advise you when to act and when to let a situation resolve itself so that you can achieve the most favorable outcome.
Your CFO can also analyze and mitigate risks from other sources, though. These often include issues relating to personnel, internal operations, and even data security.
Although it may not seem immediately important, the latter category is one that should always be taken into account since the cybercrime industry is projected to be worth approximately $6 trillion by 2021.
In essence, an experienced CFO will ensure that your company operates far more safely than it would without them.
3. Ensure Legal Compliance
Compliance issues plague thousands of businesses each year. The main issue with compliance, though, is that it’s rarely breached intentionally. Oftentimes, entrepreneurs fail to adhere to industry-related compliance standards without even knowing.
This is especially true for companies that operate within industries that are notably convoluted when it comes to regulations. These often include the health, tech, and financial industries.
Fortunately, a CFO has all of the industry knowledge that you’ll need to be wary of in order to ensure your company remains compliant.
Many businesses (especially smaller ones) tend to forego the services of a virtual CFO in order to save money. But, the costs incurred through non-compliance penalties will strongly outweigh any investment you make into hiring a CFO.
4. Forecasting
It’s simply not enough to get your company up to speed and then send you on your way. Even if your business is performing exceptionally well at the moment, you’ll need to move forward with a bit of foresight in order to ensure that you continue to perform well in the future.
As previously mentioned, CFOs understand all the nuances associated with the industry they work in. This also means they’ve learned to recognize trends and are able to make accurate predictions about industry events that may transpire in the future.
For instance, our CFO may notice a slow shift toward making use of digital media to provide better service and advise you to capitalize on the technology as soon as possible. This will put you at the forefront of the market and drastically increase your company’s performance.
Similarly, this also works as a method to avoid problems headed your way. Your CFO may see a trend that you aren’t able to and steer you in the right direction.
5. Budgeting/Bookkeeping
Despite how simple this responsibility may seem, it involves far more than simply crunching numbers and ensuring that your business has enough money to make the purchases it needs.
Instead, they’ll help you thoroughly plan both your current and future budget and take the necessary steps to get the most out of every dollar you allocate. Otherwise, you run the risk of having your company ‘bleed’ money that it could use to increase efficiency, invest in new equipment, or even scale outward.
Having a well-established budget will also provide an additional level of transparency to your employees since they’ll be able to see where your company’s priorities lie. This can directly result in increased morale for your workers, especially if you convey to them that you intend to scale your company.
Additionally, their bookkeeping role will prevent any complications from arising when it comes time to pay taxes for your business. Given that business taxes can quickly become convoluted, this benefit in itself is far worth the money you’ll invest in a CFO.
Understanding CFO Responsibilities Can Seem Difficult
But it doesn’t have to be.
With the above information about the CFO responsibilities that you should be aware of in mind, you’ll be well on your way toward making the decision that’s best for you and your company.
Want to learn more about how we can help? Feel free to get in touch with us today to see what we can do.