Most entrepreneurs do not have enough hours in the day to get everything done. They have to prioritize what they are going to get accomplished and when. 

Often, it's the financial side of a business that falls to the bottom of the list and then falls by the wayside. An entrepreneur may have someone maintaining their books, preparing their taxes and generating reports, but there is frequently no one on the team with the time or necessary skills to review financials and understand the story the books are telling and implications for future actions. They also don't have unlimited resources to solve financial problems and can't afford or it doesn't make economic sense to make a full-time financial hire. They become frustrated, feeling like they are stuck and working more or harder to stay where they are. 

In the intersection of these problems is where a Virtual CFO (Chief Financial Officer) can really come into play and help.

When properly implemented, a Virtual CFO engagement can be an investment that provides a return, instead of another expense for a business. There should goals and results for each Virtual CFO engagement. In most cases, but not always, they involve metrics around improving profitability or cash flow. Other entrepreneurs have other goals, such as freeing up more of their time. Again, a Virtual CFO can recommend and implement strategies to achieve these goals. Even companies that are very successful can still work towards improving their financial position or achieving other goals.

How can a Virtual CFO drive value for your business?

A Virtual CFO can add to the bottom line of a business by:

• Working hand-in-hand with a business owner to formulate strategies to increase the profitability and cash flow of the business.  From there, the Virtual CFO will implement monitoring and accountability into the process so results are more likely to be achieved.
• Comparing the business against industry benchmarks in order to identify areas for improvement.
• Ensuring accurate historical reporting and add value to the borrowing and/or fundraising process. A Virtual CFO can make recommendations on potential timing to borrow or raise money.
• Improving business processes in order to allow the business to operate more effectively and efficiently.

My goal today was to educate entrepreneurs on the pros and cons of engaging a virtual CFO. If you have questions about how a Virtual CFO could potentially help you or someone you know, feel free to reach out to me.

Adam Shay, CPA (N.C. License Number 35961), MBA, is managing partner of Adam Shay CPA, PLLC. He focuses on minimizing taxes and improving the financial results of entrepreneurs, and is actively involved in supporting the Wilmington entrepreneurial and startup community. For more information, visit http://www.wilmingtontaxesandaccounting.com/ or email him at [email protected]. He can also be reached by phone at (910) 256-3456.