5 min read

Being a virtual CFO means getting into the preparation


As your firm grows and evolves, shouldn’t your suite of services? By expanding your service offerings, you create better revenue opportunities for your business while increasing the value for clients.

One highly-valued, in-demand service from an increasing number of businesses is virtual (or fractional) CFO services. Business owners and accountants both solve problems. But most entrepreneurs didn’t get into business to manage the dollars and cents. After all, if they loved tracking money so much, they’d be on your side of the desk.

Most of what you consider “advisory services” can be packaged into being a virtual CFO.

However, launching this service without doing the necessary prep work creates a poor experience for everyone and can risk those relationships you spent so much time building. But don’t get overwhelmed thinking about it, we’ve got some starter questions you should be asking yourself before taking the plunge.


What’s expected of a virtual CFO

A virtual CFO will carry a lot of the responsibilities of a CFO, but remotely and on an as-needed or part-time basis. It’s the perfect hybrid for businesses that need the expertise to guide their decision-making but don’t have the budget for a recurring salary.

In this role, you would need to provide updates on the business’s financial health, offer your insight on business decisions, and provide some technical expertise on accounting processes.

With tasks like this, you can see why virtual CFOs are in high demand with business owners. Those business owners often wear many hats, and the accountant hat doesn’t get much wear. To have someone they can go to who ensures the books are up to date and turn that into actionable information? That’s priceless.


Should you offer virtual CFO services? (would we write an entire blog on this if you shouldn’t?)

Some service offerings, like payroll or managing payables and receivables, are tasks that are ideally already being done. They have limited windows of opportunity in which you can sell them to a client before you’re having to convince them to ditch their alternative for your solution.


Virtual CFO services don’t have that same limitation. Advisory is something everyone can benefit from at any point in time. If you choose to add virtual CFO services, you can reach out to every client you have a favorable relationship with and strike up a conversation about what it might look like.

Think of it as an upgrade on the service you already provide. You’re still completing accounting tasks month in and month out, but with the addition of invaluable inference and insight that can only come from your expertise. Whether it’s pulling from experience with past clients or providing a perspective that comes with greater technical know-how, these things greatly influence the decision-making of business owners navigating these challenges for the first time.


How to lean into CFO preparation

Now, we know that virtual CFO services strengthen your relationships with your clients and offer a big return for your firm, which means your firm should consider adding it to your repertoire. If you’re pondering whether it’s right for you, here are some key questions to mull over with your team.

How well do we know our clients?

Being an effective virtual CFO means being acutely in tune with the businesses you’re serving. Some of this you can take from the clients’ previous financial reporting. For example, you can learn about their seasonality or how they manage their debts.

But you also need a knowledge of the history of their business, especially with key changes they make in their money management. When did they change suppliers? Does that last influx of cash from owners need to be paid back? The bigger the picture you have, the better the advice you can provide and the more likely you’ll meet their needs.

Beyond that, you also need to know clients’ goals for the future. Knowing this will allow you to focus your efforts on the work and counsel for the best and quickest results. It will also help you prioritize the work you need to do to deliver your best value..

Do we have the staff for the additional workload?

Providing virtual CFO services can eat up a lot of your firm’s time. On top of the meetings and prep work, there’ll be other tasks and longer onboarding processes that slowly eat away at your calendar.

But the rewards? They make all the work worthwhile, as long as you’re ready for the work by properly allocating your time and resources.

Ensuring you have the capacity to manage the additional workload can be addressed two different ways. The first is by looking at your headcount, how time is allocated, and your hiring plan. Talk it over with people who own different parts of your workflow to get a gauge of what they’d need to manage an influx of work.

But the other way of ensuring you have capacity is finding ways to take tasks off of people’s plates. In some cases, this is bringing in contract workers to handle some of the menial admin work that’s low value. However, you should also investigate accounting tools (like Botkeeper) that automate tasks like report generation and account reconciliation with consistency. This will free up staff to work where you most need them.

Do we have agreed upon workflows?

I dont know if I'm CFO meme

For a firm to run at peak efficiency, there needs to be clearly agreed-upon workflows. But not just within your organization; this also applies to your clients.

When you start offering virtual CFO services, you’ll be taking people’s time away from doing the backend work as they move toward working with the final product. This means you need clearly defined responsibilities and end products to ensure someone can jump into an account and source the needed information reliably.

Then your client will make a last-minute request and it disrupts everything. This can be avoided altogether if you have an engagement letter that sets expectations. By agreeing upon a workflow with your client, you define when you’re delivering key parts of your services to ensure you’re providing high-quality work.

Then, if a client makes that last-minute request, you have the grounds to reset expectations or earn some good favor when you cite the terms of your engagement letter.

Is my accounting technology up to date?


In most cases, an abacus in an office is just a showpiece, but if you haven’t updated your accounting software recently, it might as well be just as old and out of date. If you’re going to offer virtual CFO services, an update could be necessary.

The first thing to consider is whether your accounting software operates on the cloud. Your clients will expect seamless access to their financial reporting and the more collaborative functionality you have, the better.

You should also investigate alternatives that automate a lot of your workflows. Accounting software has become sophisticated to the point of automating touchpoints, account reconciliation, and more. Your time is valuable, so consider what it would be like to get hours of it back – especially when you’re thinking about offering virtual CFO services.


Ready to open up your firm’s capacity?

There’s a lot to consider when you’re thinking of adding a new service to your firm, but this is especially true when it’s a service that’s as robust as a virtual CFO. Hopefully, these questions get you thinking about what you need to offer virtual CFO services at the highest level.

A lot of what we talked about here has benefits beyond adding a new service. Having a close understanding of your clients, workflows, and capacity pays dividends in your day-to-day operations. And changing up your accounting software can still win you back hours of your time and reduce your operational costs.

With Botkeeper, you’re working with software developed with the input of accountants. You’ll cut out the tasks that take up large chunks of time, but don’t depend on you flexing your experience. Plus, having consistent outputs you can depend on — whether it’s reports, onboarding, or otherwise — is a pleasure you have to experience to believe.

Plus, having consistent outputs you can depend on — whether it’s reports, onboarding, or otherwise — is a pleasure you have to experience to believe.

Learn more about advisory by visiting our CAS page.


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