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Who needs a virtual CFO? 4 signs you need one and 4 things they do that you’ll love

In our opinion any business that doesn’t employ a finance professional (a CFO / FD / Head of Finance) would benefit from a virtual CFO (vCFO) - but a growing business or one that is going through change/distress will benefit the most.

For most small businesses, the cost of a full time CFO is far too high to justify and, in reality, a full time position will often be unnecessary. A vCFO works with the business on a part-time basis, bringing the benefits of a seasoned finance professional at a fraction of the cost of the full time equivalent.


If any of the 4 points below sounds familiar you could benefit from a vCFO;

  1. Your sales are great but you never have enough cash It’s a common problem and can come about for a variety of reasons (debtor collection, high overheads, not enough gross profit on what you’re selling, high spend on fixed assets, high stock levels etc) and getting to the bottom of the issue and fixing it is seldom straight forward.

  2. You can’t get any useful financial / sales information out of your business Which customers make you the most money (profit, not turnover)? What’s causing your gross margin to fall? Which product area is seeing the most growth at the moment? The list of things you may want to know in order to drive your business forward is pretty much endless - if you can’t get the information you need you are simply missing opportunities.

  3. You are spending far too much time on business admin You didn’t start a business to spend your days doing admin, chasing invoices and studying your bank statement, but it’s a trap lots of business owners fall into. Admin time is wasted time. That’s time you should be spending on customer development, marketing, product development etc. In short, it costs you money and holds you back.

  4. You have an idea of how you want to move things forward, but you do not know how to get there We’ve all got plans. Maybe you are thinking about another location, an additional product line, significant software development or you want a way out of your business in 5 years. Turning a plan into reality is not easy and it can look almost impossible when you don’t have experience with the financial aspects.


So what does a vCFO actually do? Well, for starters they should be able to sort out all of the above problems for you. But essentially they will do what a full time CFO will do - oversee all financial aspects of your business. If you haven’t experienced this before, you’ll find there is a lot to love about this service;

  1. They understand your business A vCFO takes the time to really understand your business at the outset. And by this we mean much more than just understanding the numbers. They get under the skin of the organisation and find out how it all works, they find out what your customers love and what they don’t and they look at the strengths and weaknesses of the business. When you talk to your vCFO, you are talking to someone who truly understands your position, making them an extremely useful sounding board.

  2. They help you to work out a plan What do you actually want out of your business? To make a million? To only work 8 hours a week? To leave a legacy for your family? To achieve notoriety? Quite often, owners won’t 100% know what their short term or long term goals are. A good vCFO can help you focus on these goals. They can suggest things that you haven’t even thought of yet and can help steer you through some of the problem you will encounter.

  3. They show you how to get there So by now your vCFO knows your business inside and out and really understands you and what you want to get out of the business. Next they can help you devise a strategy on how you get there and break it down into manageable plans and projects. This is where the vCFO really starts earning their keep and what they will bring will depend completely on your goals and your business set up. At the most basic level this will be helping to set budgets and identifying margin and expense improvements but they can do far more than this. They can help you identify new markets and new routes to market, help you increase the number of locations you have or aid you in increasing production capacity. They will identify cash requirements to implement these plans and help you access financing.

  4. They take away your admin headache and help shoulder the burden vCFOs are admin masters and, if you have a willingness to change how a few things are done, they will be able to take most admin matters out of your hands in a short space of time so you can focus on your business. Having a vCFO who understands your business and can help you fix problems (either themselves or by using their large network of advisors and contacts) is a huge comfort for most business owners and can really help you get on and concentrate on your business and your customers.


The above is all great, but you’re probably wondering how it all works; how does the vCFO get to know the business, stay on top of it and give the support we talk about? It’s a pretty big subject (and worthy of an article in its own right) and again will differ from company to company, but the Monty approach to vCFO has some core component parts;


This is the first stage; we spend a few days really getting to know the business, so we have some initial conversations with owners and senior managers and then get out and visit different parts and locations of the business to get an employee perspective on how things are working. We also look from the customers perspective and interact with the business as a customer/lead.


We then take a detailed look at the figures that are available to us in the context of what we have learnt at the ‘understand’ phase. Typically this involves further discussions with the business and takes a couple of days

Set objectives Here we are looking at the long term objectives of the business and the business owners and this is done over a number of meetings

Strategy At this point we are still in ‘set-up’ and working with you to put a strategy in place which will take the business from where it is now (‘Understand’ and ‘Analyse’) to where everyone wants it to be (‘Objectives’).

Tasks & projects Each year a number of tasks and projects will be planned out to meet the strategy and again this takes input from the business.

Monitor and respond Each month we monitor progress of the above and make changes accordingly. Also, as the vCFO we are looking after the monthly numbers, so we keep an extremely close eye on financial performance, budgets, KPIs etc. Each month we pull together reports, undertake analysis and sit down with you to discuss the above (and anything else you want to talk about!)


If you think you could benefit from a vCFO, speak to one! They should be able to tell you exactly what they can bring to your business. And they’re experienced professionals so if they think you’d be better off with a different service (non-exec director, management accountant, HR consultant etc) they should be able to put you in touch with someone in their network to speak to. We would really recommend you look for a vCFO with experience in your sector. You’ll be amazed at the insight you can get from someone who really understands the market you operate in.


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