C-suite executives (CEO, CFO, COO) have a quintessential part in the success of any business. These three roles have to work in tandem for the achievement of the business goals. The role of a chief financial officer or CFO, in simple terms, is to manage the lifeblood of any business- the finance department. The major responsibilities of the CFO are the financial planning and strategic decision making based on the various financial reports, assessing the return on investments, conducting audits to ensure compliance to the law and vision of the business. A CFO must know the pulse of the business and be the right hand to the CEO. A successful CFO will be a master communicator, a top-notch influencer and an envoy of change. The famous quote of Benjamin Franklin, “change is the only constant” is the reality of any CFO.
As in any other sector, the advent of the internet revolutionized the corporate world. Knowledge and talent became affordably accessible at the tap of the finger. Additionally, the onset of the pandemic forced the SMEs to restructure and realign their work practices. The virtual CFO services help in guiding the business on how to tread during these changing times. The vCFO, as it is generally termed, is gaining momentum in popularity primarily due to the affordability but also due to the accessibility to expertise due to technology.
Weighing up inhouse CFO and vCFO
The speculation always remains for anything newly introduced, and the same can be said about financial services as well. A comparative study of the in-house CFO and vCFO will help in answering the 5W and 1H questions of the business owners.
An in-house CFO should be well experienced and talented to guide the business to success. The price tag for that, inclusive of the salary, benefits and perquisites will be on a higher side. This will be a challenge for the start-up and small businesses. The remuneration for the virtual CFO services will be for the duration and specific services that are chosen. This will bring the cost down to almost one-third of the cost of an in-house CFO.
The in-house CFO always carry the risk of discontinuity due to better prospects or bad health. This can affect the smooth running of the business. The vCFO services have a reduced risk in this aspect as they will always have a substitute team to take over the work.
Data Transfer and Security
There is a possibility of data transfer when a CFO change companies. Though every individual is bound by integrity and work ethics, one cannot undermine the chances of a breach in data security. The vCFO services are bound by contract on the date security of the companies they are working with.
Multiple Industry Experiences
The CFO must have a thorough knowledge of the industry to recognize the growth areas of the business and to assess the return on investments. The vCFO services always have a team of experts from across industries. Exposure to the different industries and work practices will benefit the client in multiple ways. This adds to the rich network of contacts from across the industries.
When is the Best Time to Switch to an Outsourced Accounting Service
The balance tilts in favor of…
The traditional in-house CFO and the virtual CFO have their own benefits and virtues. The changing circumstances called for new outlooks of the same role and the trending popularity of the vCFO services tilt the balance in its favor.
Cloud computing ensures quick accessibility to the different financial reports required to make informed decisions for the business. This also emphasizes the point that the efficiency of the vCFO services is not restricted by geographical boundaries. The affordability of top-notch talents has definitely had a huge impact on its popularity. The vCFO can either be a person or a team of experts, who are rich in experiences from different industries. The vCFO services are highly sensitive and adaptable to the changes in the work scenario.
There might be opinions about the lack of personal commitment to the business, but one has to remember that the work environment is turned virtual not the person or team working. The sustenance of any business depends on how fast it responds and adapts to the changes. This is possible only with the commitment of the team.
Diligen has been a pioneer in setting a high standard on the work delivered in the field of outsourcing financial services. The team has always endeavored on giving quality work in the stipulated time. The vCFO services offered by Diligen comprise a team of accomplished financial experts with business acumen. We realize it is our duty to delight the clients with value-added services. Like in-house CFO, we work alongside the business and see to it that we are always a step ahead in providing strategic decisions and financial planning to the businesses.