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Do you set new financial year goals? I know what you are thinking – what is the business equivalent of reversing the visible signs of ageing, learning a new skill or losing weight?

In all seriousness, let’s not settle for just any old resolutions –we want those that will help your business grow! Operational changes are often the best place to start because they can positively impact your bottom line.

One of the most common resolutions we see from clients this time of year is improving their finance systems. Sounds good to us – we know how you will be able to accomplish this resolution in the first quarter of 2021/22.

In today’s world of tech and automation, it seems almost ridiculous that many companies still use manual processes to run their business finances. With manual processes, your existing finance team is doing more work than necessary while compromising on accuracy. It sounds like a clunky situation for the whole company: critical decision making is delayed while manual processes are underway, and we can just picture the overflowing email inboxes that need attention. Hoping that manual reconciliation processes will be complete in a 5-day window after the end of the month is optimistic; the reality is closer to the 15th or 20th of the month for many businesses.

With this in mind, why not eliminate those pesky paper forms or spreadsheets? Instead, you could automate ongoing finance tasks with a tailored system that will make everyone happy – especially your overworked staff members who are currently drowning under piles of documents – both physical papers & digital files! Automation tools are available for accounts payable/ receivable, receipts & budget approvals, payroll and taxation.

By implementing automation tools for your finance systems, you can gain insights into your financial position in real-time and have all of the associated data required for accurate Monthly Reporting completed on the 5th of the month, without fail. You can understand your business position in real-time, not a month after the fact.

Your business will also benefit from:

 

Data Integrity

The problem with manual entries is that you have no way of knowing if the data in your forms are correct or not, and it takes a lot longer to get anything done when humans do everything. By automating finance business processes, everyone can focus on doing what they’re best at- like analyzing numbers and planning for your future!

Improved Efficiency

Automation saves time and streamlines workflows, which can make a finance team more efficient than ever before.  In addition, automation tools are processing data on your behalf 24/7.

 

Quick Approvals

Whether it’s a budget approval or a reimbursement claim, finance automation software will help you save as much as eight hours a work week – per person. As an added advantage, you can also eliminate unwieldy email threads checking on the status of every request.

 

Top to Bottom Visibility

The ability to take a 360-degree view of financial information can be beneficial for understanding your company’s current state. You’ll have the opportunity to know why fluctuating numbers are happening so you can make smarter business decisions in the future and stay ahead of any curve balls that come your way.

 

Virtual CFO’s are leading the way for businesses working ‘in the cloud’ with the best financial automation technology. They can show you how finance systems could be improved, tailoring an automation toolset for your business. An expert team will guide you through the implementation process & help to train your staff in the new and improved ways of working.

 

Rachael Turner is a member of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 500 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals.

If you would like any more information regarding the Association of VCFO’s please visit our website www.vcfoassociation.com.au

For those unfamiliar with a certain mouse and his friends, the Walt Disney Company© is a large and diversified Global 500 entertainment and media enterprise headquartered in California, USA. The company’s vision is to “entertain, inform and inspire people around the globe through the power of unparalleled storytelling.” It is one of the most recognised brands worldwide. According to the latest Annual Report, Disney’s Net Worth is $122.18 Billion. Yet it’s not the dollar figures that impress me, it’s how they consistently plan for their future.   Did you know there is a strategic plan for the next 5 years of cinematic releases? The plan is reviewed regularly, distributed on a strict timeline every quarter to the team, with tweaks for specific geographic markets.  The entire team is regularly informed of future projects, projects nearing completion or delays, new releases and the associated promotional activities. At any given time, an employee knows what is in the pipeline and understands their role in the success of future releases. Everyone, no matter their role, is working towards the same goals. Your business can also have a five-year strategic plan covering finances, operations and growth. By communicating the business goals to your team, you can align KPIs, sales targets and performance reviews with clarity. The new financial year is a fantastic time to start developing strategic goals for the next 12 months.   Ask yourself and your team what challenges shaped 2020/21 and what did you learn from them? If you invest in solving these challenges now, think of how much better off the business will be at the end of 2021/22.   If this financial year is the ‘year of change’, what about the goals for the next 24 months?   Where do you envision the business in five years time?  Get creative and dream big, you have five years to get there. Could it be expanding into a new market, moving to new premises or establishing a franchising model? Is your team ready for the change?   No matter the vision, Virtual CFO’s are experts at collaborating with businesses on their strategic plan. We understand the financial processes, tax implications, HR requirements and ‘future proofing’ needed to make strategic goals a reality. We can streamline your business operations, help you plan for steady future growth and gain the executive level support your team needs. We are here to help you through the process, creating a strategic plan for the ‘right now’ through to 2026. Rachael Turner is a member of the Virtual CFO Association.   The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 500 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals.   If you would like any more information regarding the Association of VCFO’s please visit our website www.vcfoassociation.com.au

Let me be clear, this article is trying to ENCOURAGE your accounting firm to offer Virtual CFO services to your clients because clients need help with the strategic financial management of their businesses.

Most firms will have clients that have outgrown their in-house financial management capabilities. More than likely these clients are often frustrated, worried and disappointed with unreliable and unpredictable nature of their finance and know they need help. They wake up every day hoping to find a better way – they don’t need much persuading that they need help.

In saying that, I’d advise you be realistic about the challenges. If it was easy, then everyone would be doing it.

 As many firms have discovered, fulfilling the clients needs and making a decent return for the effort involved is proving to be quite a challenge.

 So what are the problems Accounting firms typically encounter?.

The biggest problems they face when trying to get Virtual CFO services off the ground are pricing, scoping and resourcing. This plays out as the client become very hard ‘manage’ on the monthly agreed fee. Typically Accounting firms adopt a tiered  or pyramid (senior, manager, partner) team structure  It is common to hear that the client will not deal with the ‘senior’ or ‘manager’ allocated to the job but goes straight to the partner. If the Partners time has not been costed into the recurring fee, profit margins quickly get eaten away.

What strikes me about this problem is that the CFO role is part of the internal capability of a business and the owner has expectations that a Virtual CFO will be just as real actual and tangible as an in-house CFO, as and when they need them. They expect their VCFO to be accessible, available, dependable, flexible, efficient and capable. These expectations are more or less at odds with the pyramid (senior, manager, partner) team structure model.

4 Benefits of working with a VCFO Association member

• Clients get the best value outcome when they have a Virtual CFO working in harmony with their traditional compliance accountants and bookkeeping function . Our CFO’s are industry seasoned, strategic problem solvers who understand the complexity that is unique to different industry verticals.
• The Virtual CFO Association makes it easy to find the best available VCFO’s in the market. Our website is designed to be a one-stop-shop to search by Industry, Name or Location. Our strict proficiency criteria give you comfort that all members are at the top of their game and are capable of dealing directly with the client. This is much easier than finding, training inexperienced staff and dealing with staff turnover.
• We reduce risk to the firm on a few fronts. Risk of souring a client relationship by overpromising and not meeting their expectations. Risk that you will train your staff up and then they leave, whereas our members would be looking to create lifetime clients.
• Accounting firms can leverage their client relationship to make a decent return, engaging with Association of Virtual CFO’s members under a white label or sub-contract arrangement. This allows the firm to ‘package up’ the services, protect and enhance the client relationship, rather than hand it over.

Virtual CFO’s provide financial leadership for business and credibility with external stakeholders. A VCFO will be actively involved setting, reviewing and implementing strategy. They assist with establishing the reporting foundations, systems, strategic plans, budgets, forecasts as well as cash flows to ensure there is adequate funding in place to seize opportunities and grow the business. Importantly they communicate across the business, working as an integral part of the client’s management team to improve profitability.

Ultimately, VCFO’s allow business owners to focus on their clients and grow their business by driving the strategic direction and freeing them from financial management problems.

Surely this is a win-win scenario for firms, VCFO Association members and clients.

David Dillon is the President of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging Virtual CFO sector within the accounting profession. Collectively the association currently has over 500 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals. If you would like any more information regarding the Association of Virtual CFO’s, please visit our website www.vcfoassociation.com.au

All Metrics are not created Equal when it comes to understanding where the cash in your business is located.

A common frustration from business owners is “I know I’m making profit but it’s not in my bank account”

The 3C’s of Cash Flow  (otherwise known as your Cash Conversion Cycle) is one metric that’s shatter proof and tells you everything you need to know about where your Profit and your Cash is at the same time.

The 3C’s of Cash Flow are made up of

✔ How many days it takes to collect payment from your customers

✔ How many days you take to pay your suppliers

✔ How many days you keep your Inventory in your Warehouse before you sell it

Measuring these metrics consistently over a period of time gives you insight as to how quickly cash flows through in and out of your business.

Why is this information important ?

Understanding your cash flow allows you to make decisions on how you run your business, how you can maximize your cash and put an end to your frustration!

Virtual CFO’s understand financial strategy and are there to guide your business through the frustration. They have the experience and passion but without the salary of a full-time CFO.

Available on demand so jump on our website and book a free consultation today.

#VCFO #VirtualCFO #finance #cfos #cfo #smes #accounting #accountants

 

Chris Kondou is a member of the Virtual CFO Association.

The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 500 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals. If you would like any more information regarding the Association of VCFO’s, please visit our website www.vcfoassociation.com.au

In the world of SME business, business owners make the most of available resources and budgets to manage the integral finance operations. In lieu of large budgets, SME’s have typically made do with one bookkeeper or finance person internally and an annual visit to their accountant at year end – with all their records in hand.   In comparison, large corporations that have the resources to employ full finance teams,  typically consist of a team of accountants and assistant accountants, lead by a Financial Controller and Chief Financial Officer (CFO). The team is managing the finance operations on a daily basis and creating the long term strategy for business growth.   We understand there are multiple factors at play when growing your finance operations – long term strategy, expansion plans, existing teams. It’s important to understand the difference between a bookkeeper and a CFO – they are complementary roles, not the same thing.   A bookkeeper is traditionally responsible for: ●     Keeping accurate financial records ●     Performing accounting transactions ●     Creating financial reports ●     Monitoring internal controls ●     Reconciling cash and other accounts ●     Performing routine financial and administrative functions   A bookkeeper is typically the day-to-day manager of the tactical accounting issues. The primary function of the bookkeeper is to maintain and operate the books and records of the business, looking back at data already generated.   A growing business requires solid, strategic leadership; this requires much more than a bookkeeper can or should provide.   A CFO is responsible for:   ●     Projecting financials to aid in strategic decision making ●     Interpreting financial data and trends for management use, looking at the story behind the numbers, not just the numbers ●     Financial planning, both long and short-term ●     Developing effective capital structure, managing institutional assets, managing lender/banking relationships ●     Managing effectiveness and efficiency of operations ●     Managing and understanding financial risks   A CFO takes on a broader role in planning for the current and future financial needs of the business. While the primary function is to look ahead, the CFO must also be able to understand past financial performance in order to accurately predict the organisation’s financial future.   A Bookkeeper’s role is to look back.    A Chief Financial Officer’s role is to look forward.   From our experience, with the absence of a true CFO, key responsibilities are delegated to inexperienced employees – resulting in missed opportunities and reactive decision making.   Alternatively, Senior Management (typically the Managing Director or Business Owner) assumes the duties of CFO in their “spare time”.   A business cannot reach its full potential without a true CFO, and the right finance team structure behind it. An expert Virtual CFO can be a part of your team in a matter of weeks, bringing their expertise and industry knowledge with them. It’s worth the investment in your business’s future and reclaiming your spare time for something more enjoyable.     Rachael Turner is a member of the Virtual CFO Association. The Virtual CFO Association is an elite peer network, advocating and promoting the emerging VCFO sector within the accounting profession. Collectively the association currently has over 500 years of industry experience, with highly qualified and experienced specialists spread across more than 20 industry verticals. If you would like any more information regarding the Association of VCFO’s please visit our website www.vcfoassociation.com.au