Modern world startups are unaware of the fact of how virtual CFO services are opening the door of opportunities for their business. Every startup dream of growing its company revenue with a minimal amount of time. Hitting the financial goals that are long over the horizon is the most satisfying feeling for any business owner.
If your business has hit the financial goals you have set for it, the next big step is knowledge about CFO services and why your business requires outsourced virtual CFO services? This article will help you determine the benefits of CFO services for startups and one that suits you the best.
What is a Virtual CFO?
As the name suggests, the person who performs the services of a chief financial officer is a CFO. However, those companies who do not have in house CFO, hire outsourced CFO Service providers for getting the job done virtually.
The number of new companies has expanded in the previous decade, with innovation preparing for more pioneering action than any other time in recent years. In the tech area solely, the quantity of US new companies grew 47 per cent over the most recent ten years.
Why Your Business needs a virtual CFO?
Often small scale business owners think that they can work as a Chief Financial Officer effectively to reduce their costs. However, this is considered to be a grave mistake as the lack of CFO leads to the downfall of the startup.
According to the study carried out by U.S bank suggested that 82% of the startups fail because of the poor understanding of cash flow or poor management of finances. It is the situation where virtual CFO works best for the newly established businesses because they offer services at a flexible rate to empower small scale business setups at a fraction of cost as compared to the in-house finance officer.
Moreover, phases are incorporating rapid growth of the business which can put your finances into a tailspin, at times where you are not prepared for it. Here virtual CFO helps you in navigating through periods of rapid growth and deliver appropriate strategies for the upcoming phase of your business.
With outsourcing, young startups can saddle the mastery of proficient experts at a small amount of the expense of pulling in and holding a full-time worker. Some of the services that virtual CFO offer are:
· Cash Flow forecasting
· Financial risk management
· Cost management
· Financial reporting
· Debt reduction
A virtual CFO work depends on the size and working environment of the company along with business needs. The virtual CFO is often paid via per hour or monthly plan as convenient to both parties.
Advantages of virtual CFO services for startups
There are numerous advantages to procuring a virtual CFO to help deal with your developing business financial posture.
Control Budget Estimation
The most attractive benefit of a virtual CFO is the ability to manage the cost of the company.
According to the estimates provided by salary.com, the average salary of a Chief Financial Officer is $364,000. That number might make an entrepreneur's eyes bug out. Including other benefits might make the salary way out of scope.
So, in this case, hiring outsourced CFO Service would be an excellent idea for your startup. You can facilitate yourself to customize the required business financial services.
Growth with your startup
Another essential point to be considered here is that the virtual CFO solution would have an opportunity to grow with your startup. Of course, the business needs change with time; for example, your business needs would be different at $1 million marks and will differ at $10 million imprints. A virtual CFO can assist you in exploring through various development stages structure a financial point of view.
Virtual CFO work with a bunch of various customers, empowering the startups to keep up with affordable prices and no quality compromise. A CFO proposes solutions to different financial situations and apply strategies to keep the business healthy.
We have shared the benefits of hiring virtual CFO services from a third party. Due to fraction of cost, this concept is catching on in the tech world.