Select Your Location
Every business enterprise needs a financial officer to monitor financial activities and prepare interim and annual financial statements. A CFO reports the financial activities of a business after analysing and compiling the gathered information provided by other departments in the organisation. Generally, a Virtual Chief Financial Officer (VCFO) is outsourced by small and medium-scale businesses in place of a Chief Financial Officer (CFO). The term and conditions of hiring a VCFO can be flexible and at an affordable cost.
Table of Contents
A VCFO or Virtual Chief Financial Officer is an outsourced service provider offering high-skill financial assistance as per the needs of the businesses, similar to a chief financial officer who works in large organisations with a team of professionals. Unlike a regular CFO, a VCFO doesn’t need a proper infrastructural setup in the office premises. A VCFO can be a single person or entity which provides VCFO services. A VCFO has experience working with various companies and has a bigger pool of experts for providing industry insights, networking and guiding decisions.A VCFO can be retained on a quarterly, monthly and annual basis at a lesser cost than the traditional CFO.
A business entity chooses a CFO or VCFO for financial services and accounting services. The VCFO will help build a financial strategy with the help of expert professionals having the best insights about the industries and market demands. The VCFO offers similar services to what CFO reports for businesses. Some of the roles and functions discussed in the blog are:
A VCFO provides a similar service of due diligence to the businesses, starting from the registration procedure to analysing the fundraising process. A CFO reports a potential or ongoing litigation and evaluates and reviews contracts and agreements with employees, clients, vendors and consultants. A complete financial inspection, analysing old reports and forecasting financial reports of a business.
Cash flow management is a process of tracking money which goes out of the business and what comes in. the process requires continuous monitoring to optimise the minute details of every single transaction of the company. Effective cash management planning can help predict how much money will be available for debt, salary,vendor invoices and investment-related activities. The CFO reports on cash flows are analysed and discussed at length by the potential investor to check the financial position of the businesses.
Like CFO reports, a virtual CFO also manages day-to-day accounting with timely and accurate reporting of the company’s expenses. A virtual chief financial officer prepares invoices of the clients to whom the good and services are offered and prepare month-wise closure reports. A VCFO adopts and implements the best financial practices and reporting standards for system optimisation.
A Virtual CFO takes care of the multiple filings to tax authorities for income tax, GST and professional tax. A list of compliance has been adhered to while carrying out day-to-day functioning related to labour law compliance, company law compliance and regulatory changes. This ensures businesses don’t attract any violation for non-adherence and can efficiently work and function as per the needs of the company.
A Virtual CFO prepares monthly, quarterly and annual financial statements, balance sheets and statements of cash flows. The Virtual CFO reports and maintains the accounting standards and ensures all transactions are recorded completely, accurately, and timely in the accounting books. The VCFO can create a cloud-based customised dashboard with key financial indicators. The dashboard can be updated based on the company’s financial transactions and can be reviewed quickly as all information is available online.
The CFO reports on the internal control and process by framing financial strategies and policies to safeguard and protect assets from loss and deterioration. A standard internal control mechanism shall be in place all the time to increase the employees’ productivity, curb the event related to misappropriation, theft, fraud and money laundering and minimise the losses incurred by the company.
To avert a crisis, CFOs are the central figures guiding the company to make necessary changes ranging from job cuts to restructuring of client’s debt and company’s management. This reshuffling is done in view to avoid future losses.
Nowadays, both small and large businesses are hiring a virtual chief financial officer to prepare reports and handle finances that the CFO reports earlier while working for the companies. VCFO oversees all business activities and has an objective and neutral approach towards providing services as they are unaware of the internal discussion and debate among employees. VCFOs specialise in assisting companies in taking their financial strategy to the next stage.
Read our Article: Why the Role of CFO is vital in MIS and Board Reporting?
Raghvendra Sonker has completed his Graduation from Gujarat National Law University. He has a keen interest in legal drafting, writing articles, and research papers. His core interest areas are Banking and Financial Issues.
Black money has been the subject of heated political debate in India for a long time. Successiv...
The Apex Court pronounced a judgement in the case titled Tata Motors Vs The Brihan Mumbai Elect...
Since economies are moving towards digitalisation and making it feasible to conduct transaction...
The Alternative Investment Funds (AIFs) Pro-rata and Pari-Passu Rights Proposal Consultation Pa...
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
Are you human?: 4 + 1 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Under the Indian Transfer Pricing Regulations, outstanding receivable has been one of the major issues. In this art...
01 May, 2021
Addressing the challenges and automation of the finance function of a company, the role of CFO is critical for busi...
05 Jan, 2021
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!