Glorified as a ‘scorekeeper’ reporting the financial matters of a company, an CFO is the expert financial advisor for SMEs. Alongside handling financial facets of a company, a CFO morphs his numbers into strategies to help enterprises earn profits.

Role of a CFO for Small Businesses:

  1. Performs Financial Analysis:

A CFO knows his numbers. He performs financial analysis repeatedly that is the key to business growth. With professional financial analysis, the decision-makers can plan better for the future. Without a doubt, a good financial analysis and planning is central to company-wide strategic and operational decisions.

2. Devises Business Strategies:

Business strategy is the secret of running an enterprise successfully. Beyond the garb of an accountant, a CFO is instrumental in developing business strategies related to budgeting, risk management, financial reporting, and cash-flow management. It is only with expert business advice that small businesses can hit the path to a profitable future.

3. Handles Budget and Expenses:

For small business enterprises, maintaining positive cash flow is of prime importance. Based on rolling budgeting and forecasting, he can always limit expenses or increase investments. For ex.: a CFO understands that unnecessary staffing and payroll expenses can damage the budget. With a virtual CFO, you get constant advice on improving incoming cash flow while keeping the outgoing cash flow in check.

4. Evaluates Performance:

A CFO is also involved in evaluating revenue performance year after year. By developing cash flow reports, revenue reports, ROI reports, expense reports and financial statements on a monthly or quarterly basis, a CFO can always bring eye-opening insights for the CEO to make important business decisions.

5. Provide Break-Even Analysis:

Break even analysis refers to placing total costs (fixed costs plus variables costs) in comparison with total revenue of a company. It is the point where the company is neither running in profit nor in loss. A virtual CFO helps a company pull various levers to manage that Break Even Point towards accelerated organization growth and regulated income and expenses to avoid any financial crisis.

6. Develops Debt Planning:

For the financial health of an organization, a practical debt planning created by a CFO is vital for SMEs. It prevents financial crisis due to piling up of interest rates, which is detrimental to the survival of a company.

7. Implements Accounting Policies:

A CFO brings structure to the accounting system by developing and implementing certain policies and procedures. This helps in creating structured and well-managed accounting system in the organization, reducing financial risks.

8. Functions as a Financial Advisor:

Financial health determines the scope of growth of a company. With proper financial planning, a CFO helps the decision-makers and managers of the company to focus on growth of a company without fear.

9. Provides MIS Reports Regularly:

A virtual CFO is responsible for creating accurate and regular MIS reports showing financial health, operational success, inter departmental leverage etc. of a company to the senior stakeholders.

10. Offers Audit Support:

The number-cruncher CFO is in the front-line to satisfy all the queries raised by the auditors from time to time.

Why Should I Hire a Virtual CFO?

A virtual CFO is paid on hourly basis, unlike full-time CFOs. He performs the function of an accountant, controller, financial advisor, strategic enabler and risk manager. In general, a virtual CFO will perform the following critical roles for your small scale business:

  • Reviews and critically assesses business performance.
  • Provide financial analysis and insights to the decision-makers of a company.
  • Evaluate and implement best practices in terms of budgeting, strategy-making, and target-setting etc.
  • Evaluates risks behind every business strategy and continuously prevents and prepares for impending risks faced by the organization.
  • Intelligently manages data security matters and supervises keenly to avoid data breaches.

The author of this article is finance professional with 20+ years of experience. If you need to reach out, do write us back at

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