When your business grows beyond a certain stage it is common that bookkeeping and accounting fall behind. You don’t get reports on time and inaccuracies that creep into the system hurt your understanding and management of your business. This is typically because you need a controller or CFO. In this article we discuss which you might need, if you need both, and if virtual controller or CFO services are your best choice. Very often a virtual controller is the best first choice.
When you start seeing mistakes in your financial reports or when they are not getting done on time, you need to beef up your bookkeeping. When you are not getting any useful insights out of your financial reports you need better accounting services. You might be in the midst of a business crisis and need business crisis management or simply need an infusion of new cash in order to grow. But, your financial records are hurting instead of helping your efforts. Now is when you need someone to ride herd on your bookkeeping and accounting operations.
The job of your controller is to help make financial decisions as well as oversee daily financial operations. He or she uses the information that your bookkeepers and accountants provide and presents it to you in customized reports that provide meaningful insights and actionable results. A controller oversees cost accounting, all bookkeeping and accounting operations, accounts receivable and payable, cash receipts, bills to be paid, and cash flow. And, the controller will pass information to management and instructions to bookkeeping and accounting staff.
What your controller can do for you is make your entire bookkeeping system run efficiently, prevent the accumulation of errors in the system, and look ahead to do things like check if potential clients are creditworthy. With a controller you will have metrics to more-effectively track what matters for your business.
A chief financial officer oversees all financial matters for your business. The most important part of having a CFO is that their level of skill and experience is such that you will get help with critical decisions when you need it. The strategic guidance that a CFO provides can be invaluable to a growing business but commonly comes at a higher cost than a small business can afford. That is why virtual CFO services can be so valuable. This list will give you a good idea of what you get from a CFO:
• Guidance with the creation of strategic goals and vision
• Advanced financial planning to include scenario modeling, opportunity analysis and budgets, and cash flow management with forecasting.
• High-level preparation of financial statements, reports, and evaluations
• Assessment of financial risk to include mapping of costs and benefits as well as planning for contingencies
• Management of costs to include assessments of productivity and talent with recommendations, review of your supply chain, and analysis of capital investments with due diligence
• Identification of business opportunities
• Evaluation of funding and its administration
• Management and reduction of debt
• Transformative changes in your business
Growing businesses get more complex. It can be difficult to see the path forward when you are expanding but someone with CFO skills can help you see the way. The benefit of our virtual CFO services is that you can ease into it via the virtual route.
As you can see, there are many tasks that either a controller or CFO will handle. As such, most businesses do not need to have someone doing both jobs. Does your company need a controller or CFO? As a rule, the benefit of a CFO is in long term, complex financial planning with the development of effective strategic planning. The benefit of a controller comes from closer supervision of day to day operations. When you have a virtual controller you will typically upgrade the technological side of your bookkeeping and accounting operations so that your controller or even your virtual bookkeeping department can handle things from offsite.
When you have a virtual CFO you will benefit from the same technological upgrades. An advantage of having a virtual CFO is that you typically do not need these services full time. The virtual CFO will oversee your operations, suggest changes and upgrades as needed, and provide you will the amount of oversight that you need when you need it. The CFO’s experience will come to bear when major financial decisions need to be made and can be had with video reports followed by face to face online chats. In short, with a virtual CFO you do not need to provide a corner office large enough for a miniature golf course along with a high salary and benefits. Rather, you provide an internet connection and come to an agreement about just how much help you need.
To the extent that you need someone to oversee daily operations of your financial staff and especially to institute technological changes, a controller is a good choice. To the extent that you need someone with the experience and skill to lead your business into a whole new financial world, you need an experienced CFO.
Both a controller and a CFO are administrative positions. What is important is that the person handling the job has ready access to all necessary data. In today’s world of bookkeeping and accounting, all such information can be available via the internet. Using bookkeeping programs like QuickBooks Online, you can have your bookkeeping staff in-house and a virtual controller or CFO. Or, you can have a virtual bookkeeping and accounting department.
The first advantage of going virtual with either of these jobs is that you can typically get a higher skill set by going virtual. The second advantage is that you can get the job done at a lower cost. The third, and most important, advantage is that with a more experienced and skilled person doing the job you will experience transformational changes in your business resulting in greater success and profits.
For more information about how a virtual controller, CFO, or bookkeeping department can help your business, contact us at Exigo Business Solutions.
