Managing the finance of any venture is critical to its success. This responsibility typically rests on the shoulders of the Chief Financial Officer (CFO) — a key executive who oversees the company’s financial health and strategy. At a high level, they are responsible for managing a company's financial operations, financial planning, risk management, and ensuring compliance with financial regulations. They are also in charge of advising leadership on strategic financial decisions.
In today’s dynamic business environment, effective financial leadership is needed not only for large enterprises, but also for smaller companies. Considering that the finance function is so vital and crucial for any organisation, there are several companies that are enrolling the services of virtual CFOs(vCFOs) in order to help with their finance operations and bring much-needed structure to finance functions, without the overhead of a permanent in-house hire.
So what or who is a vCFO ?
A vCFO is one who carries out all the responsibilities of a typical CFO but functions from a remote location and works on a flexible, project-by-project or part-time basis. There are several companies like startups, Small and Medium Enterprises (SMEs), non-profits and growing businesses that are at a stage where they cannot afford to hire a full-time CFO, so they prefer hiring vCFO. Essentially, vCFOs serve as strategic partners, guiding organisations through the complexities of achieving business success.
So why are businesses leaning toward this model of hiring CFOs on-demand?
Full time CFOs are paid huge packages and other benefits such as vacations, bonuses and so on. On the other hand, the hiring of virtual CFOs is a cost-effective proposition since there is no tie-in to long-term contracts. VCFOs offer their services at a fraction of the cost needed to be paid to full-time CFOs. They mostly work on an hourly billing or monthly retainer model that works very well for smaller organisations that are at a growth stage.
Businesses stand to immensely gain from the expertise of a seasoned financial professional who most often come with years of experience.
Companies have the convenient option to scale the services of vCFOs based on business requirements. Investors always prefer companies that have the advantage of a strong financial governance. The presence of a vCFO adds credibility to the financial reports and investor communication shared by an organisation. The presence of a vCFO also lets the top leadership of the company not get distracted by financial duties. They can focus on their core strengths, grow the business, build sales and innovate. With tools like Zoom, Slack and other cloud-based platforms readily available, it is much easier for virtual CFOs to collaborate with key stakeholders in the organisation. VCFOs also have the advantage of having worked across diverse industries – they bring the diverse experience they have gained which works to the benefit of the company hiring the vCFO services. All these factors have ensured that companies are now much more open to hiring vCFOs.
How do Virtual CFO services work?
A virtual CFO need not be just a single person who is available on an ad hoc basis. It could even be a team of people composed of tax planners and accountants who help with financial leadership and guidance to businesses remotely.
Virtual CFOs offer an entire range of services that are of immense value to organisations.
They help chart out the financial roadmap for a business, aligned with short- and long-term goals to ensure that all finance-related decisions are data-driven and future-focused. This includes setting revenue targets and financial KPIs and capital allocation strategies. Their involvement in the business keeps the business agile and better prepared for economic changes with the help of annual budgets which help in identifying variances in actual and planned business performance. VCFOs monitor liquidity very closely by ensuring optimised working capital and efficient emergency fund planning. They are also in charge of making available financial reports (monthly, quarterly or annual) and providing the necessary insights into a company’s profitability.
VCFOs play a critical role in helping startups prepare for and navigate funding rounds from seed stage to Series A and beyond. Their responsibility includes the ensuring of compliance with local and global financial regulations.
VCFO services have emerged as a game-changer for SMEs and early-stage companies. These organisations often face challenges in the financial domain but may lack the resources to hire a full-time CFO. By offering expert financial guidance on a flexible, as-needed basis, vCFOs help businesses manage their finances strategically, ensure compliance, and make data-driven decisions that support long-term growth.
How can Infosys BPM help?
Unlock the full potential of a Virtual CFO by combining financial expertise with the power of digital transformation. To thrive in today's evolving financial landscape, digitisation is essential, regardless of your CFO model (in-house or virtual).
Infosys BPM’s Finance and Accounting services provide comprehensive, end-to-end support to help CFOs perform their roles with greater efficiency and strategic impact. These solutions empower finance leaders to make informed decisions, drive business growth, and navigate complexity with confidence.
Connect with us to learn how our services can deliver meaningful value to your organisation.
