Virtual CFO all the go
Written on the 7 October 2009
CASH flows and overheads can be time-consuming for any business manager, but for Gold Coast company Complete Financial Balance, hiring a virtual chief financial officer (CFO) has helped the business to stay profitable through the downturn.
Base salaries for chief financial officers start at $100,000 but a number of accounting firms offer an outsourced service on an ‘as required’ basis, as a means to support companies in growth transition.
Complete Financial Balance principal Graham Campbell, says contracting a virtual CFO keeps his superannuation and risk management firm accountable in an affordable way, while allowing him to focus on the job at hand.
“We had gone down the track of employing a person in that position (CFO), so we head-hunted someone for a full time role, but it wasn’t cost effective at that stage,” he says.
“Our business has grown and even in the recession we’ve survived quite well. Having a virtual CFO helped us identify where the costs are in the business, which is very pertinent in today’s economic climate.
“It makes you accountable for costs, focuses on the profitability of the business – with increments you get to the stage when you can afford a CFO, which we could do if we keep with the program for the next 12 months.”
Campbell concedes that without a virtual CFO his business wouldn’t have fared so well through the recession – while revenue dropped between 7 per cent and 10 per cent, profitability stayed the same.
MHM Accountants principal Bradley Conn, says the virtual CFO service adds value to SMEs, in a market where a full time CFO could cost upwards of $200,000.
“You may not be of the maturity or financial position to afford a full time CFO, but a virtual CFO can bring some of the benefits and experience by engaging the service of an accounting firm with all the required skills,” says Conn.
“At a base of $100,000 for a CFO, if you spend $50,000 for a virtual CFO you get an awful lot of work and you can strengthen the organisation at half the cost.
“In a very small business start up someone is very good at what they do but they have to be the chief, the cook, the bottle washer and everything between – all things to all people, which distracts a person from the core work of the business.”