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Aprio cloud blog

March 6, 2018 at 10:14 AM

How to Hire a Virtual CFO

Written by
Bruce Phillips
Bruce Phillips |
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Virtual CFO

The Internet has been a game changer in the way we live and do business. Not only do we have access to a world of information, myriad ecommerce choices, and endless funny cat videos, we also have access to a variety of online resources that can help us achieve our business goals.

In the past, when it came to managing business finances, owners had two options: hire an accountant in their local area, or try and handle their own finances. Neither scenario was that great.

For starters, many CEOs find managing their business finances akin to line dancing in brand new shoes – it’s entirely painful.

Secondly, local accountants don’t have access to a diverse range of financial resources or experience and are typically limited to generating financial statements and keeping clients compliant.

But many of today’s businesses compete on a global scale and are in need of insights that will help them manage their operations to greater growth and profitability. Plain old accounting or bookkeeping services aren’t going to be able to do that, but a virtual CFO will.

Hiring a VCFO that’s part of an online accounting firm means forming a long-term partnership with a financial adviser whose knowledge, resources, and expertise can be leveraged on-demand.

If you’re considering hiring a virtual CFO, here are some things to consider:


Do Not Hire Part Time Help

You’ve got to have the right mindset from the get-go. You’re not hiring part-time help, though granted, you may only need your virtual CFO’s help for a few hours each week.

Nope, you’ve got to think of this process as looking for the right long-term financial partner for your company.

Here’s what part-time help does:

  • Bookkeeping
  • Taxes
  • Payroll

Here’s what a financial partner does:

  • Develops an investment strategy
  • Helps determine shares and options for capital raises
  • Maintains a corporate budget with short- and long-term financial goals
  • Manages cash flow
  • Determines the best asset classes for investment
  • Supervises critical business numbers
  • Maintains strict debt collection policies to get you the money owed to you
  • Determines the best financing options when capital is needed for expansion

See the difference?

Find a Virtual CFO with the Right Experience

Make sure prospective CFOs have experience with similar businesses or have previously worked in your industry. Someone who is already familiar with the financial issues facing your particular field won’t require much time to get up to speed.

HPC, for instance, works with a lot of tech startups and small businesses that started abroad but are now looking to start doing business in the United States. We know firsthand the challenges these specific companies face and can immediately come up with plans and strategies to improve their overall finance operations.

Ask Questions

After hearing a prospective CFO rattle off some impressive financial mumbo-jumbo during your Skype call, you and your colleagues may be ready to do a virtual group hug, but don’t hire anyone until you’ve asked some questions. While you may know little about finance in general, you DO know your business goals and worst fears very well, and this is where you want to look for questions.

For instance, where do you see the company in three to five years? You may want to ask how the CFO would handle a change in your corporation status? What keeps him or her up at night? Ask how they would handle an IRS audit seeking verification of expenses. Would they handle these situations in a way you’re comfortable with?

Also, ask each potential financial partner for a list of references and make sure to follow up with this list to see if clients have been happy with the CFO’s services, fees and availability.

Find Out Who Will Handle Your Account

Imagine you meet that special someone through an online dating website. Their profile picture is appealing, they share the same hobbies and interests, and your initial phone call was effortless. Excited that you’ve potentially found “the one,” you show up to the local Olive Garden for your first date only to find they sent their mother instead.  

Whether it’s a romantic, platonic or business partnership, none of us like surprises - we all want to know exactly who we are going to be dealing with.

Some firms may have more experienced partners handling sales and new business, but then they pass the actual account on to junior staff. Other firms may offshore everything but the VCFO work.

HPC uses U.S. employees for everything, and we have a clear delineation between our virtual CFOs and our accounting staff, so you’ll never be surprised who you’re dealing with.

Don’t Obsess Over Fees

You’ll want to ask about fees upfront for sure, but don’t base your entire decision solely on costs. Keep in mind that a CFO who charges more may have more experience and more to offer. They may also be able to work faster than a novice who charges less but needs more time to do the same job.

Also, a good VCFO will offer insights that can save your business big bucks, resulting in an ROI far higher than the cost of the VCFO service. Your partner may advise you on things like figuring out how to be more profitable, to lowering operating costs, to minimizing taxes.

Bottom line: Don’t obsess over fees – you get what you pay for.

Hiring a VCFO is a great idea for any business looking for financial guidance and peace of mind. By following these hiring tips, you’ll be sure to form a partnership with someone who has the knowledge, experience, and foresight required to navigate the complexities of doing business in today’s marketplace.

If you’re looking to add a strategic financial partner to your team, contact HPC today to schedule a free consultation.


Bruce Phillips

About Bruce Phillips

Bruce Phillips is Founder & CEO of HPC, an early adopter of cloud technology for accounting and other businesses. More recently he has been featured by Xero, Expensify, Gusto, Receipt Bank, and Hubdoc for successfully implementing this technology to firms in numerous industries.