Virtual CFOs can save SMEs in more ways than one
Hiring a virtual CFO can be seen as a mark of ‘hitting the bigtime’, but for small businesses it can also be the difference between cashflow and bust.
William Buck partner Matthew Illman said there are compelling reasons for small and medium size businesses to employ a virtual CFO.
For more than 15 years, the firm has offered a virtual CFO service to clients, providing strategic leadership, working capital and cashflow management, and more.
Illman said bringing in a virtual CFO enables a business to access the expertise and experience they need, beyond their own inhouse bookkeeping staff, while not incurring the often-prohibitive cost of employing a CFO internally.
“Employing a virtual CFO enables the bookkeeping function to be linked with reporting, to better forecast cashflow, manage performance and profitability, and dig into the analysis with a greater level of expertise,” he said.
Clients using William Buck’s Virtual CFO service enjoy an ongoing relationship with their business advisory specialist, of which Illman is one.
“Most of the businesses I’ve worked with in this space, I’ve worked with for many years,” he said.
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“That obviously creates a good level of synergy, understanding and connection with the business around what they’re going through and how they like to operate.
In most instances, the virtual CFO will meet with a client monthly to discuss the results and performance.
“But then there might be times where different things are needed, whether that’s leading into end of financial year with tax planning or other key events,” Illman said.
“We’re able to tailor what we do for clients as to when they need it.”
This can also include helping a company to meet its need for environmental, social and governance (ESG) reporting – whether as a supplier to a larger ESG-obligated entity, applying for bank finance, or because its own customers want transparency over sustainability and more.
Illman said changes in technology in recent years have made it more common for small and medium businesses to formally engage a virtual CEO.
Cloud-based accounting software has enabled remote collaboration and real-time financial insights, while AI-driven analytics have turbocharged data-driven decision making, forecasting and trend discovery.
“This has made the service a lot easier and more efficient for both parties to work on the business together,” he said.
SMEs look to bring in a virtual CFO to gain visibility over financial performance.
“The trigger for a business can be not being able to understand how cashflow is being managed or forecast into the future,” Illman said.
“There can be a number of moving parts linking cashflow and general business performance, and we often see businesses who need that extra help in interpreting the financial data they have in their accounting software.”
Setting forecasts, producing budgets, and maintaining other personalised KPIs would enable the business to pinpoint issues and identify opportunities, he added.
“At the monthly meetings, we can explain those financial results that we’re seeing, including any warning signs – so that we’re getting onto any area of concern early, understanding possible causes and taking actions to rectify the situation.”
William Buck’s service also extends to capability building in a company’s inhouse functions before they engage the virtual CFO.
The firm’s business advisory services are comprehensive, ranging from specialised tax advice to restructuring and asset protection to private wealth management and superannuation strategies.
“We can look at a business from the aspect of the virtual CFO, and also take into consideration everything else the business owners have going on, and use our breadth of service to optimise every aspect of their financial situation.”
