The Future of Small Business Finance: How Virtual CFO Services are Transforming the Industry?
India is home to over 70 million small businesses. Hence, they surely form a crucial part of the country’s economy. But over 50 percent of them don’t survive beyond a year. One of the most significant reasons is poor financial planning and management. Finance has become more of a strategy that requires financial experts to optimize. Virtual CFOs prove a solution for small businesses that cannot afford full-time CFOs. But how do they benefit small businesses? Here’s a blog that answers this question.
5 Ways Virtual CFOs are Transforming the Small Business Sector
Here are five ways hiring a virtual CFO can benefit a small business.
- Substantial Cost Savings
Cost is the foremost benefit small businesses achieve from hiring a virtual CFO. Recruiting a full-time CFO may cost half a-crore rupees annually. And that might be like half the company’s value or annual budget. Let alone the cost of employee benefits, etc.
Virtual CFOs come at a much lower price than full-time ones. Small businesses only have to pay the resource fee and get access to the CFO’s extensive and diverse experience of working with multiple businesses throughout their career.
Thus, companies can save much money otherwise spent on salary and employee benefits. They can use the money saved in other areas of their business.
- Experience Advantage
Hiring an external virtual CFO offers companies the experience advantage. Usually, these CFOs are highly experienced resources with many feathers in their cap. And that’s the reason why financial management organizations hire them. Companies can benefit from their experience and develop a robust financial plan and strategy to tackle uncertainties.
- Increased Flexibility
While working with a CFO, you can exercise better control over the CFO’s engagement. It means you can decide whether to work on an hourly retainer or fixed basis with the virtual CFO. You can also decide how many hours the virtual CFO will work for you. You can scale up and down based on your needs. This isn’t possible with a full-time CFO, who will work exclusively for you on a monthly salary.
- High Level of Diversity
Virtual CFOs are highly seasoned resources with diverse experience working with multi-sized companies and types of employees. They are well aware of the financial problems of businesses of varying sizes and have the knowledge, expertise, and experience to solve the most complex of financial concerns.
Here, you benefit as a small business whose financial problem might not be new to the virtual CFO. Hence, they might provide a solution effortlessly, helping you get out of it. Additionally, virtual CFOs can help small businesses with near-to-accurate forecasts through technology and their intellect, enabling the latter to prepare for uncertainties and sail through the storm safely.
- Compliance
Virtual CFOs are well-versed and updated with the latest compliance, rules, and regulations. They have an in-depth understanding of financial compliance that helps the small business avoid non-compliance penalties and also keep their reputation.
In a nutshell, virtual CFOs are transforming the small business landscape through three major factors – cost, compliance, and experience. Besides, the flexibility virtual CFOs offer will only help the practice of hiring virtual CFOs to grow. We hope this article provided adequate insights into the benefits of virtual CFOs.