What is a Virtual CFO?


Put simply, CFOs are like a Senior Advisor to the 2IC to the CEO (Chief Executive Officer) or owner of the business. They are mainly found in medium to large sized companies, where it is not possible for the CEO to focus on everything, so he will rely on a Senior Manager from each department to let him know how everything is going. They work with businesses from $1m to $200m+ turnover and help with 3-5 year financial strategic planning and project implementation. They also help you source finance via banks and will act as your advisor during the process.

Monthly Meetings

Unlike your tax accountant, CFOs and Business Consultants will spend the time with you and meet with you at least once a month to help you with a range of operational and strategic issues, including the recommendation of the appropriate systems and set the wheels in motion to ensure you have regular monthly meetings with the financials you need to help make decisions and track the progress of your goals. They are implementation specialists so they don’t just plan, they will get involved in making sure your plan becomes a reality.

Project Management

Due to their corporate experience, they specialise in project management, so they will work with you and your entire team to develop strategies which will help you achieve your ultimate business goals. Their intention is to work with you for the long term, so they become a part of your team.

Management Reports

No, they are not just Accountants, but do they do have experience with numbers and presenting them in a way that is not confusing. Ideally, you should have some KPIs that will mean something to you after a few months of training. Initially, it maybe a bit confusing, but eventually they will mean something to you. Developed specifically for your industry / market that you operate in. No matter what that is, every market has their own unique issues to be aware of.

Valuation of the Business – Return on Investment

The value they can bring to your business in terms of increased ultimate sale value is undeniable. They can help you to run various objective tests / evaluations to value your business at the start of a campaign and continually re-evaluate to prove to you there is an increased value as a direct result of their involvement. As long as your aim is to improve your business, if all you want to do is save money on taxes and you are not interested in growth, measuring performance is a little more complicated, but not impossible. You may think financials are not important, but to a potential buyer regular accounts, budgets and performance reports are essential tools which prove the historical growth and ultimate long-term success and value of the business going forward.

Running a Business – Skills Required

Running a business is not straight forward, you need to have experience with a number of key areas including HR, IT, Sales, Marketing, Administration… which is impossible for one person to have all this knowledge, you may need help. This applies to small business owners too, but quite often the owner does the whole job without even thinking about it. No wonder you feel like you are going around and around in circles. Because you are.

Who would buy a business with dodgy work practices? Faulty systems & procedures and lack of structure simply add to the bad health of the company and cleaning bad practices takes a lot of time. Any prospective buyer will want to know your business is in good shape, has good customer relations and a good track record of not only profit, there are many other issues like happy staff, a good impact on the environment, no shifting of profits for one reason or another, etc.

CFOs take control of finances, streamline processes, implement cashflow forecast modelling and ensure good record keeping procedures are in place. If you don’t know what any of these things are, don’t worry, we can explain it to you in plain English. We welcome any questions you may have.

Depending on the size of the business, CFOs may have a Financial Controller beneath them who handle the financials and the CFO manages from a much higher level. But because of their years of experience, they can adapt to many different scenarios depending on your unique set of circumstances.

Another set of eyes and ears

We know about taxes and we sometimes help out with complicated tax strategies… but where we differ from your Tax Accountant is we don’t do tax for a living (especially individual tax returns) because we focus on Small to Medium sized Businesses and large Corporates. We help you run your business and for that, you need to be qualified and experienced. You also need to work with other specialists and respect their opinion. We do help clients check their FBT returns (if requested) and help clients understand how to compile information required for the working papers to ensure the right result is achieved.

Some clients don’t care as long as the job is done, so we adapt to the style and format required by the client. We understand some people are just not interested in the finances. They just want the money coming into the bank account. Others are interested and this makes good sense for those who want to be more pro-active.

Rarely do we step on the toes of other accounting specialists, but we do ask questions… without going out on the attack. In accounting, there are always two or three ways you can do things… another set of eyes and ears is not a bad thing. As long as the questions are designed to protect the owner’s interest, the advisor’s interest and ultimately we all learn from the experience.

  • Management reporting and dashboard reporting
  • Cashflow modelling, reporting and management
  • Budget and Forecasting Preparation, analysis and tracking
  • Finance process reviews
  • Systems & Procedures
  • Review payroll compliance
  • Cloud accounting advice
  • Business Automation and Integration with all electronic devices inside and outside of the business

We liaise with your bookkeeper, accounting team, tax advisor and audit team, we work with them to ensure there is no overlap and they are up-to-date with the latest technologies.

What does a Virtual CFO cost?

If you can’t afford a full-time CFO, a Virtual CFO makes a lot of sense. Especially, if you see them once a month, just to help you get on track, get focused and check on the health of your business once a month.

You have to consider it costs between $150K – $200K + on-costs for a corporation to hire a CFO. In fact – I would estimate it costs around $85K + on-costs to hire a good Executive Assistant. It shouldn’t surprise you that a good Tax Accountant with many years experience will charge you $300 – $500 per hour, but they are also able to save you a significant amount of money and their costs will outweigh the benefits you receive.

Written by

Sylvana Livissianis CPA and Business Advisor

6 August 2016