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Why You Should Offer VCFO Services

In this series of articles for accountants and bookkeeping professionals who are looking to explore the opportunities of virtual cloud services, Sharon Brown Director of Magic Beans accountancy practice shares her ideas and tips for adding VCFO services to your offering.

First up, we’ll discover what VCFO services are and how you can start to offer them to your clients.

What is a VCFO?

Using a virtual chief finance officer (VCFO or Virtual CFO) is a way for businesses to access expert financial guidance and business support without having to commit to the cost of a full-time CFO (chief financial officer). It allows smaller businesses to receive the same financial support and services as that of much larger companies, but at a fraction of the cost. A VCFO can also have other titles such as Outsourced Finance Director, Fractional CFO or Virtual Finance Director.

What is the function of a VCFO?

A VCFO sits between the bookkeeper and the client’s management team, providing them with the financial support they need to run their business. With micro businesses, the bookkeeper and management team might be the same person. With bigger businesses, the VCFO can sometimes sit between the bookkeeper and the finance director (FD), providing that extra support the bookkeeper isn’t trained to deliver or the FD has no time to cover.

Why offer VCFO services and not traditional accountancy services?

There’s a definite shortfall in services provided by traditional firms to businesses with no in-house finance manager – getting accounts once a year, nine months after the year-end isn’t the service that clients need. But with cloud accounting, it doesn’t have to be like that.

Traditional accountants are very focused on classic methods of saving tax, buying capital equipment, and putting money into pensions, but often they don’t look out for much simpler ways to save their clients’ money like identifying overpayment to suppliers or customers who haven’t paid. Traditional accounting services often don’t happen in real-time and can also be time-consuming, so making the move to cloud technology is a win for both accountant and client.

Bank reconciliation is a good example of saving time and money by working in the cloud. As a VCFO, you can insist that clients upload all the correct paperwork to their accounting software like Xero or QuickBooks, and then because the cloud accounting software can connect to online bank accounts and credit card accounts in the cloud, bank transactions sync automatically each day and are matched against the corresponding transaction. All that’s left to do in the process is for the user to confirm that the transactions match.

Comparing this process to traditional reconciliation methods, you can clearly see how automating the task has huge time-saving benefits – ideal for the VCFO role.

VCFO services offer huge advantages to small businesses

Hiring a cost-effective VCFO can be somewhat of a revolution for a small business. Since VCFOs invest in developing their cloud technology and digital solutions, their services are infinitely more affordable to small businesses because they are offered to more clients at the same time. A business owner can tailor their financial guidance or business growth support to match the exact needs of their business, rather than spending money on potentially pricey basic accounting services.

Developing a trusted advisor relationship with clients as VCFO

Offering VCFO services can help you expand on your basic services and move into a wider advisory role with your clients, rather than simply performing accountancy tasks.

As a VCFO, you can build close relationships with clients and become a trusted advisor, and with that comes the benefit of them being more likely to run something past you before making a decision. This gives you a chance to catch things ahead of time before they go wrong. You’ll also know their accounts are always up to date so you can advise confidently on their live situation.

By having clients’ data at your fingertips, you can become familiar with clients from your firm that you may not personally manage. When a client contacts you needing to make a decision and they realise you know more about their business in 30 minutes than they do, they’re impressed.

Talking to clients regularly about their business issues means you can understand and give input on their goals and proactively help them to achieve them. This sees you, as a VCFO, moving away from process-driven tasks and into more of a consulting role – consistently demonstrating the value you add to a business.

Watch this space for the next guest article from Sharon Brown. In the meantime, find out more about how to start offering VCFO services by using Float.

Further reading:

6 Of The Best Apps For VCFOs

Sharon Brown

Sharon Brown is a chartered accountant, with over 15 years post qualification experience, and she co-founded Magic Beans in March 2016 to offer a VCFO service to businesses who don't need or can't afford a full time accountant, but need real time access to their finances.