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Virtual CFO service: A smart choice for the MSMEs

Thousands of new businesses are started every day, but only a few ever make it to market. What, then, is it that causes so many new businesses to fail, and why is it difficult for even well-established companies to keep afloat in such stormy seas?

There might be a wide variety of factors contributing to the failure of these enterprises. Yet, one of the most convincing reasons might be a lack of skill or, in some instances, knowledge to manage the financial element of the firm, which in turn leads to holding oneself back from growing in business.

Virtual CFO service

A virtual Chief Financial Officer (VCFO) can take care of your business’s financial analytics and get it back on the path to success by fully examining the areas of finance where the firm may be falling behind.

Due to COVID-19, where there is only a steep ravine, we have reached the point of no return. At this point, the choice is between stopping there and attempting to get past the barrier. The Indian government responded to the situation at this critical juncture by implementing the INR 20 lakh crore Atma Nirbhar Bharat initiative to enhance our optimism and faith. We need a lot of resolve and willpower to alter the path of events. It is what the Atma Nirbhar Bharat package has to offer.

The Indian government understood this and exploited it to create a set of reformative and incentive-based policies to capitalize on the situation. The pandemic is predicted to cause significant disruption in the global economic system. For MSMEs or micro, small, and medium-sized businesses, which account for a significant amount of the manufacturing and service sectors of the Indian economy, virtual CFO services have received special attention. The post-COVID period is expected to be the golden age of MSME in the country since the government has opened all level crossings to enable the speedy functioning of the MSME train.

To promote all varieties of micro, small, and medium-sized enterprises throughout the country, the government has also updated its qualifying standards and enlarged the meaning of the term MSME, or virtual CFO services for MSMEs.

The Virtual Services Era

A new frontier known as virtual services has recently opened as both private and professional life are disturbed by social isolation and home detention. This new frontier has been made possible thanks to the recent quick advancement in digital technology, which came to our aid during this challenging period.

An application provides access to a virtual service, the same (or better) service previously supplied from a physical location. These apps suddenly take over because users find them practical, flexible, and comprehensive.

The COVID storm sweeps aside conventional thinking and inertia, propelling us into a new era in the history of human progress. Our inventive brains overcame the pandemic’s huge challenge of destroying our way of life with equally great solutions. Online services are becoming commonplace.

The development of digital technology has encouraged the development of virtual counterparts of many services provided via the Internet that are just as effective and do away with the need for face-to-face interactions between consumers and service providers.

An excellent illustration of this is the virtual CFO (Chief Financial Officer), which offers various financial services on the cloud.

MSME and virtual CFO (chief financial officer)

MSMEs, or micro, small, and medium-sized businesses, may concentrate on their primary business while the virtual CFO (Chief Financial Officer) looks after their financial health. To get things going, let’s define what a CFO for MSMEs performs.

The capacity for professional organizations to grow rests on efficient financial management. From the first stages of registration through the early fledgling stage and eventually to the mature stages of the company lifecycle, every move the firm makes affects its cash flow. Additionally, businesses need a skilled CFO (Chief Financial Officer) on the executive team.

Since good management of the financial and financial reporting components affects a company’s performance, becoming a CFO (Chief Financial Officer) is a highly challenging profession. The Chief Financial Officer’s (CFO) primary responsibilities as a member of the senior executives are risk governance, financial monitoring, and record-keeping.

Numerous micro and smaller firms fail at different stages due to poor financial management, while many other organizations struggle to grow despite having significant potential. Most small firms could afford to employ an internal CFO (Chief Financial Officer), who may help them navigate and strengthen their financial stability to endure unforeseen setbacks.

MSME and virtual CFO (chief financial officer)

A reputable virtual CFO Service provider should handle the following business functions:

  • Bookkeeping and accounting.
  • Budgeting for and projecting cash flows.
  • Creating financial statements and maintaining records
  • Financial services
  • Tax assistance
  • Compliance
  • Corporate responsibility
  • Additional services

Bookkeeping and accounting

A business must have a consulting lawyer on call and professionally manage the tax, accounting, or compliance duties. The second option allows you to accept the guidance of a Virtual CFO for MSMEs services to choose and comply with the proper corporate organization. This option is typically appropriate for small and medium-sized businesses. It is possible to have the internal expertise to handle them, but it is also doable.

Your virtual CFO (Chief Financial Officer) can explain to you your company’s main financial indicators and how to enhance them to defend your bottom line since they have years of experience dealing with small businesses.

Forecasting and planning for cash flow

Gaining a better understanding of the financial condition within a target period is necessary to make the correct business choices. The cash flow forecast provided by the virtual CFO (Chief Financial Officer) enables you to determine how much more financing would be required for a specific project and how to make the appropriate financial arrangements to ensure on-time completion.

Putting together financial accounts and keeping records

Managers utilize financial figures to make quick decisions. They resemble health evaluations of several company departments. They also assist in getting outside investments or loans.

Financial services

Every business has peaks and troughs in terms of revenue and cash flows. But because of the convincing arguments, the company could still be able to get a loan from the bank during a recession. You may depend on your made-up CFO for the same (Chief Financial Officer).

Financial services

Help with taxes

Most small business owners are ignorant of the direct and indirect impacts that many of their daily decisions have on their taxes. They commonly believe there won’t have been any taxes payable for a month or year when they didn’t make any money, which is incorrect.


That was one of the essential services your virtual CFO (Chief Financial Officer) provided to assist your business in adhering to the latest Companies Act, FEMA, Income Tax Act, IPR law, Contract Act, and other requirements.

Corporate Responsibility

Your virtual CFO (Chief Financial Officer) advises you on the rules and regulations that must be obeyed and assists you in choosing the optimal corporate structure for your business. Consequently, the credibility of the shareholders, clients, and institutional investors is raised.

In many respects, a virtual CFO may be considered an ordinary CFO, but with many additional advantages. A virtual CFO is a new and innovative aspect that allows young businesses to get the benefits of having a CFO without paying the high wages often associated with such positions.

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