{"id":20801,"date":"2019-06-28T15:44:49","date_gmt":"2019-06-28T10:14:49","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=20801"},"modified":"2023-08-01T16:42:04","modified_gmt":"2023-08-01T11:12:04","slug":"role-of-virtual-cfo-in-sme","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/role-of-virtual-cfo-in-sme\/","title":{"rendered":"Role of Virtual CFO in an SME"},"content":{"rendered":"<p>SMEs are playing a very important role in the Indian manufacturing sector and providing a platform to the businessperson which as a result helps in the economic growth of the company. Due to its significant contribution, SMEs occupies a very important position in the economic sector in terms of output and export. Now-a-days SMEs are the biggest employment -providing sectors after Agriculture and forms a major part of India&rsquo;s industrial base. A CFO enables business owners in taking an informed decision. The function performed by the <a href=\"https:\/\/enterslice.com\/virtual-cfo\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"virtual CFO (opens in a new tab)\">virtual CFO<\/a> is as similar as Full-time CFO. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the SMEs?<\/h2>\n\n\n\n<p>SMEs are governed by the Micro, Small and Medium Enterprises\nDevelopment (MSMED) Act, 2006.To avail the benefit of SMEs, it is important to\nregister the firm under the act. SMEs contribution towards employment\ngeneration is significant and also provides livelihood opportunities by\npromoting entrepreneurship.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Who can apply for SME registration?<\/h2>\n\n\n\n<p>All classes and sectors of enterprises mentioned below can\napply for the registration-<\/p>\n\n\n\n<ul>\n<li>Trading,\n<\/li>\n\n\n\n<li>Hindu\nundivided family, <\/li>\n\n\n\n<li>Service\nor Manufacturing,<\/li>\n\n\n\n<li>Co-operative\nsociety, <\/li>\n\n\n\n<li>Partnership\nfirm Proprietorship, <\/li>\n\n\n\n<li>Association\nof persons, <\/li>\n\n\n\n<li>Company\nor Undertaking.<\/li>\n<\/ul>\n\n\n\n<p>After <a href=\"https:\/\/enterslice.com\/msme-registration\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"SME registration (opens in a new tab)\">SME registration<\/a> respective enterprises get qualified for availing the benefits provided under the Act.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the Benefits availed by the SMEs?<\/h2>\n\n\n\n<p>After getting registration under the <strong>MSMED Act 2006<\/strong><sup><a href=\"https:\/\/samadhaan.msme.gov.in\/WriteReadData\/DocumentFile\/MSMED2006act.pdf\"><strong>[1]<\/strong><\/a><\/sup>, the enterprises can avail various benefits like &ndash; <\/p>\n\n\n\n<ul>\n<li>Availability of Easy finance from Banks<\/li>\n\n\n\n<li>Preference in acquiring Government tenders,<\/li>\n\n\n\n<li>Stamp duty and octroi benefits<\/li>\n\n\n\n<li>Concession in electricity bills<\/li>\n\n\n\n<li>Timely receipt of payments from the buyers or debtors.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Role of SMEs in the Present Scenario<\/h2>\n\n\n\n<p>SMEs are playing a vital role in the large local manufacturing sector and as asupplier to global manufacturers. A part of SMEs is also investing in R&amp;D in order to survive in the competitive <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> and has contributed about 7% in India&rsquo;s GDP. In addition, SMEs are also dealing globally by acquiring foreign countries as a part of their globalization process with all the growth strategy. The government of India has always taken initiative by implementing various policies and initiatives to support the SMEs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Who is CFO?<\/h2>\n\n\n\n<p>A CFO is a senior executive person responsible for the\ncompany&rsquo;s present condition in financial terms and managing the financial\nactions of the company.<\/p>\n\n\n\n<p>The whole responsibility lies on the CFO to decide how and\nwhere to invest the company&rsquo;s money and to oversee the capital structure of the\ncompany. The CFO is treated as the treasurer who is responsible for managing\nthe company&rsquo;s financials.<\/p>\n\n\n\n<p><\/p><div class=\"shadow2\"><strong>Note &ndash; CFO is the top-level financial advisor and controller\nwhich handles all the matters related to cash flow and financial planning and\noversee the taxation issues of the company.<\/strong><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Who is the Virtual CFO?<\/h2>\n\n\n\n<p>The company who has not appointed the\nin-house Chief financial officer can opt for Virtual CFO services whose primary\nresponsibility is to manage the financials of the company including (financial\nrisks, financial reporting and,record).<\/p>\n\n\n\n<p><\/p><div class=\"shadow2\"><strong>Note &ndash; In case of small enterprises,\nSMEs and startups,it is difficult to appoint CFO, as CFO is a recognized\nmanagement authority and it is out of budget for small, SMEs and startups\nenterprises to appoint in-house CFO, in that only case Virtual CFO is required.<\/strong><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What are the functions of Virtual CFO?<\/h2>\n\n\n\n<p>Virtual CFO assists the companies by\nproviding the following services to understand the financial capability and\nhealth of the business. &ndash;<\/p>\n\n\n\n<ul>\n<li>Projections of Financial and cash flow through Virtual CFO services by the help of Income and financial statements and cash flow statement.<\/li>\n\n\n\n<li>To understand the cash utilization, proper management of cash flow is done by the virtual CFO along with that debtors and creditors management through identification of key operation indicators as it is an important factor to mitigate the risk factor.<\/li>\n\n\n\n<li>Virtual CFO helps in budget planning which helps in analyzing the cash requirement and as a result helps in balancing the income and expenses of the company.<\/li>\n\n\n\n<li>Forecasting the financial and cash flow projections is the key function performed by the Virtual CFO with the addition that it helps in reducing the wastage of resources and implement such strategy which helps in improving the productivity.<\/li>\n\n\n\n<li>To change the organizational structure of the company as and when required to mitigate the risk and to enhance the number of opportunities.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Role of Virtual CFO in an SME<\/h2>\n\n\n\n<p>In an SME, the virtual CFO helps the business owners to bridge the gap between finances, operations and strategies to majorly focus on achieving the long-term goals which help the business owners in taking an affirmed and strong decision-making process. a virtual CFO bridges the gap between the finance, operations, and strategy that helps the business owner to focus on long term goals.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-medium\"><img decoding=\"async\" loading=\"lazy\" width=\"300\" height=\"217\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/Virtual-CFO-300x217.jpg\" alt=\"Virtual-CFO\" class=\"wp-image-20833\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/Virtual-CFO-300x217.jpg 300w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/Virtual-CFO.jpg 571w\" sizes=\"(max-width: 300px) 100vw, 300px\"\/><figcaption class=\"wp-element-caption\">Virtual-CFO<\/figcaption><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Functions of Virtual CFO in an SME <\/strong><\/h2>\n\n\n\n<ul>\n<li>To\nensure and oversee the financial or <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Accounting&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Accounting is the language of business, serving as the backbone of financial management and decision-making. It involves the systematic recording, analysis, and reporting of financial(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/accounting\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>accounting<\/a> team that the profit figures\nprovide a true and fair reflection of the company&rsquo;s performance for Aparticular\nperiod <\/li>\n\n\n\n<li>To\nensure better management and planning for the next financial year by\nmaintainingthe balance sheet records all the assets and liabilities of the\ncompany.<\/li>\n\n\n\n<li>Keeping\na check on the internal controls, as SMEs usually suffer from the deficit\nmanagement and organizational structure which is a sign of weak internal\ncontrol. It helps in providing a true and fair position of the company&rsquo;s\nperformance for a particular period.<\/li>\n\n\n\n<li>As\nthey are expected to maintain and lend a high-level view of the organization\nand the business environment to create a strong financial base and are also\nresponsible for setting up a strong financial base of the company that plays a\nvital role in the overall organizational success. <\/li>\n\n\n\n<li>They\nare expected to enhance and maintain a cordial-relationships with the leaders\nof the organization to create and fulfill a common vision.<\/li>\n<\/ul>\n\n\n\n<p><\/p><div class=\"shadow2\"><strong>Note &ndash; The leadership team is limited to business\nowners\/partners in case of an SME, as a result, to increase functional\neffectiveness and minimize overall expenses, a Virtual CFO is expected to\nperform various functions such as HR, Information Technology, payroll, etc. <\/strong><\/div>\n\n\n\n<ul>\n<li>In\na SMEs, where competition is cut-throat and access to capital is limited. A\nvirtual CFO can help business owners in improving both top and bottom line\nrevenue figure. A Virtual CFO offers SMEs opportunities to open up new markets\nand propel growth.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>As Virtual CFO in an organization helps the SMEs in financial advisory, cash flow forecasting, Budgeting, <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Accounting Policies&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Accounting policies are regulations or guidelines that businesses must follow when creating and presenting their financial statements. They establish a consistent framework for producing(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/accounting-policies\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Accounting policies<\/a> and procedures, internal control, debt planning and corporate governance. Virtual financial services also help in focusing on the other business activities of the business. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Related Links<\/h2>\n\n\n\n<div class=\"row\">\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/virtual-cfo\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>Virtual CFO<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/virtual-cfo-services\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>Virtual CFO Service<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/hire-virtual-cfo\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>Hire Virtual CFO<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/learning\/10-benefits-of-hiring-virtual-cfo-services\/\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>Benifits OF Virtual CFO<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/learning\/vcfo-services-revolutionizing-small-business-financials\/\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>Virtual CFO for Small Business<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/cfo-support-services\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>CFO Support Services<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/learning\/roles-and-responsibilities-of-a-modern-day-cfo\/\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>CFO Role<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/cfo-software\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>CFO Software<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/on-demand-cfo\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>On Demand CFO<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<div class=\"col-xs-12 col-sm-12 col-md-12 col-lg-6\">\n<a href=\"https:\/\/enterslice.com\/remote-cfo-services\" class=\"text-decoration-none\">\n<div class=\"learning-detail-card\">\n<h6>Remote CFO Services<\/h6>\n<div class=\"icon-back\"><i class=\"fa fa-angle-right\"><\/i><\/div>\n<\/div>\n<\/a>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>SMEs are playing a very important role in the Indian manufacturing sector and providing a platform to the businessperson which as a result helps in the economic growth of the company. Due to its significant contribution, SMEs occupies a very important position in the economic sector in terms of output and export. Now-a-days SMEs are [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":20816,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[11],"tags":[1115,1463],"acf":{"service_id":"219"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Role of Virtual CFO in Small and Medium Enterprises<\/title>\n<meta name=\"description\" content=\"Virtual CFO helps SMEs in financial advisory, cash flow forecasting, Budgeting, internal control, debt planning and corporate governance.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/role-of-virtual-cfo-in-sme\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Role of Virtual CFO in Small and Medium Enterprises\" \/>\n<meta property=\"og:description\" content=\"Virtual CFO helps SMEs in financial advisory, cash flow forecasting, Budgeting, internal control, debt planning and corporate governance.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/role-of-virtual-cfo-in-sme\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-06-28T10:14:49+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-01T11:12:04+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/Role-of-virtual-CFO-in-an-SME.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"700\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Narendra Kumar","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/nk-1.jpg","authorDescription":"Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.","postViews":446,"readingTime":4,"nextPost":{"id":20774,"slug":"gst-on-educational-institutions"},"prevPost":{"id":20725,"slug":"petty-food-businesses"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/Role-of-virtual-CFO-in-an-SME.jpg","postTerms":"CFO Service","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/20801"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=20801"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/20801\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/20816"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=20801"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=20801"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=20801"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}