For entrepreneurs, finance rarely comes naturally, nor should that be their prerogative. With money flowing in and out of your company, keeping everything on track, organised, and streamlined can be a real challenge. There is compliance, reports, tax, grants, legals, HR - a lot of things to try and balance. However, as the entrepreneur, you really want to be focusing on sales, marketing, and product, and every minute you are not doing so has opportunity cost.

Hiring a full-time CFO is often not feasible for a small to medium sized business with a limited budget. However, you can get expert financial help cost-effectively by working with a virtual CFO (VCFO). There is a strong wave around the motion of “executive-as-a-service” which is how this model is delivered. There is an application of this being developed across other executive functions too, and it is a fast-growing space because it has a strong product-market-fit. Meeting the needs of early stage businesses and having a quantifiable ROI.

A virtual CFO, as the name implies, is a remote entity overseeing the responsibilities of a Chief Finance Officer. Startups to medium-sized businesses increasingly turn to virtual CFOs for strategic financial guidance. This service is cheaper, flexible and can be scaled up or down depending on your business.

Importantly, we like to differentiate the idea of a Virtual CFO and a Part-time CFO. We believe the best approach is adapting a team of financial professionals who, as a unit, become your VCFO; not one single person who is static and lacks scale and resources behind them. Additionally, as there is an array of tasks from simple to complex, it’s important that you pair the right resources and cost against it, rather than having an expensive consultant CFO doing some basic workflow. That would be a bad use of capital.

What does the VCFO support unit look like?

The teams that work as the VCFO unit come from a variety of highly skilled backgrounds, which is a powerful combination. These backgrounds include:

• Chief Financial Officer(s)

• Financial Controller(s)

• Financial Planning & Commercial Manager(s)

• Finance Manager(s)

• Management & Financial Accountants

How Can a Virtual CFO Improve Your Business?

Here are some common benefits and solutions a VCFO can help solve:

• Better and more accurate reporting

• Independent review of your accounts

• Financial planning and forecasting

• Tax optimisation (and keeping your external accountant honest)

• Ensuring you are taking advantage of all possible grants and incentives

• Helping with commercial decision making and deal making; a second set of eyes

• Asking questions about remuneration strategy

• Helping source debt

• Bringing a serious network of partners from accounting, legal, FX, outsourcing, logistics, building, coaching (the list continues)

• Seeing a large array of startups and SMEs, and triangulating what is working in those businesses and sharing insights across a cohort

• Broad experience across a range of industries and entrepreneurs

• A community of clients

When do I need a Part-time CFO or a Full-time CFO?

All businesses eventually need help in finance. It’s important to acknowledge and understand your needs in order to find the right solution when you are ready to add any type of CFO into your business.

If you are a small entity and you have reasonably uncomplex affairs (we suggest between $1M-$15M), and are able to engage effectively with external parties, a VCFO can be ideal. If you are larger, more complex and require physical presence and operational support, you might want to consider hiring internally. The VCFO is often a stepping stone towards eventually hiring a full-time CFO.

Although, it is important to know that a virtual CFO will not sit in all of your internal meetings, nor be in your office. A VCFO is not intended to look after daily or weekly workflows. These things need to be solved by other resources (whether internal or external). This is a common misunderstanding. Nonetheless, there is also a benefit to this: by way of cost and by focusing on only the matters of strategic importance.

How does TWIYO deliver VCFO?

TWIYO has created two VCFO service tiers aimed at meeting the needs of variously sized businesses as they grow:

VCFO Lite

VCFO Lite is perfect for small business owners with a simple operating structure who want to grow their startups. This is also ideal for entrepreneurs who want to test the waters with a VCFO service before considering the more involved service level.

With VCFO Lite, we provide:

• Planning services: Initial and annual forecasting and financial model build

• Reporting services: End of month (EOM) reporting, board reports, and compliance checks

• Decision support: Monthly checkpoints calls to review reports, discuss the findings, issues, opportunities, outlook, and recommendations

VCFO Plus

VCFO Plus is for small to medium-sized companies looking to further their growth. If you are looking for more comprehensive financial assistance, then VCFO Plus is perfect for you.

With VCFO Plus, we provide

• Planning services: Initial forecast & financial model build, biannual reforecast, on a 2 or 3-way financial model

• Reporting services: End of month (EOM) reporting, board reports, compliance checks, and consolidated reporting

• Decision support: Decision support, fortnightly checkpoints calls, and email & meeting access as needed

Revolutionise Your Finance Function with TWIYO

Our approach is unique. We are a specialist VCFO firm and we exclusively provide this service as part of the accounting value chain. We refrain from being a broad services firm that bolts on VCFO as a part of their existing tax and bookkeeping business.

VCFO synergises perfectly with our Capital Readiness Programs, where we help businesses prepare and execute on capital events like raises, exits or acquisitions.

Summary:

If you have a small to medium sized business with a limited budget, you should seriously consider engaging a virtual CFO service. A virtual CFO is a great way to relieve your team of the stress that comes with finance management, and optimise capital so that you can focus your time and money on other aspects of your growing business, knowing your finances are being organised, streamlined, and thoroughly managed. A VCFO is the perfect solution for meeting the needs of early stage businesses and having a quantifiable ROI.