April 4, 2023
Tommy Laupsa

vCFO – Virtual CFO – Big benefits to SME’s – compounded and enabled.

vCFO – a “new normal” as a result of the massive changes created by the COVID-19 crisis? Did the concept of Value and ROI change with the virus?

Imminently, within the space of a few weeks, we are finding out that offices don’t need to be filed with staff as before. Working from home is a time and money saver and, in many cases, has taken significant stress factors away from us, like long commutes to our offices, traffic and parking issues. We have learnt that working from home, is without loss of productivity in the main and that in many cases have produced significant improvements and gains in productivity.

Virtual working is as much about our mindset as it is about logistic responses to unplanned events. If we are willing to adapt and make use of technology advances, forward-thinking CFO’s will increasingly prove that vCFO engagement is less costly and a more effective way to get work done. All documentation, accounting and business management systems can now be shared and managed online; we have shared information online in our office space now for many decades – the COVID-19 experience has showed us that we can now expand our reach outside the confines of our office space.

vCFO’s are traditional, high level experts in their profession of Financial Management, Financial Controlling, and Accounting. We have built up solid experienced from a variety of industrial sectors and most of us are certified professionals, often supported with an MBA degree. vCFO’s work remotely instead of in-house. In many cases, a vCFO will offer additional fractional or interim services in order to service clients who are not yet ready for or in need of a full-time CFO. We often support our client’s CFO’s with specific initiatives and programs, working together for the optimal financial solution.

Can a vCFO offer services to clients anywhere in the world? In theory why not. The process of moving the vCFO engagement forward globally cannot be stopped. The benefits to our clients of attracting the best talented CFO’s, is now more in reach than ever before and with the recent crisis it has become a more acceptable practise. The vCFO business model, for talented CFO’s, who have built up solid experience and knowhow, is a very attractive and rewarding model, which will equate into positive client experience – a win / win personalised engagement model.

I believe it may be too far-sighted for us as vCFO’s to be totally 100% virtual. This would depend on the size of the client and the issues on the client’s agenda to be resolved. I still believe there are benefits for both clients and vCFO’s to have some face time and presence, specially at the start of the engagement, to obtain a thorough overview and understanding of each other, and also for vCFO to meet the Executive and Finance teams in person. There may also be instances where the agenda of the client is more suitable by the presence of the vCFO, like for example, a meeting with Banks, Board and / or an AGM.

As the expert vCFO we will work to fine tune our client’s financial strategy and to maximise shareholder value, accelerate growth and achieve desired growth and sustainable profit goals. In addition, further high-level client benefits of the vCFO are as follows;

  • Access to experienced financial experts. Our clients get the brightest financial brains on hand in an instant via Zoom or other online meeting systems, as if they were in the office next door
  • The client time is more flexible. Meetings can be set at times that suit a busy schedule
  • Growth and planning guidance. vCFO can help with growth and profit planning and can prepare projections for management and other stakeholders
  • Strategic advice. vCFO can work on a realistic financial strategy to improve cash-flow and profit and help guide the business towards it
  • Support with navigating complex issues. Our client has expert help with pricing, costing, margins, targets, interpreting management accounts and providing useful reports that the owner and staff can easily understand
  • Seamless systems. Documents can be shared, collaborated on and stored online. Final accounts and recommendations can be presented, just as if our client and vCFO were sitting together face to face

A vCFO is an extremely strategic hire for businesses of any size to have. It should be considered an investment, not a cost, as the right vCFO will always provide a return on investment to our clients, in the way of improved profits margins and cash flows, faster and more sustainable growth, more effective and efficient operations, improved vendor contracts and relationships, debt and equity funding, strategic relationships, and more. This is particularly true for:

  • Clients who have achieved significant growth but cannot yet justify the cost of an experienced in-house CFO
  • Clients preparing for a transaction such as capital raising, merger, acquisition, IPO, or sale
  • Clients who are experiencing increased complexity and the need to understand the financial implications
  • Clients who are in need of a financial turnaround and enhanced financial standing.
  • Clients preparing for digital business transformation and other large change initiatives to their business models.

The values of the CFO have not change with this virtual role vCFO, in most cases the likelihood is that values will have improved. The relentless drive for organisational and shareholder value is strongly intact, with a clear focus on ROI and cash flow. This is why vCFO is a value proposition that should be tabled by SME business owners and shareholders.