Controller Services or Virtual CFO Services: Which Option Should You Go For?

Controller services and virtual CFO services are becoming increasingly popular for business growth. However, both provide comparable services, so deciding which is best for your company might be difficult.

A controller might be crucial to maintaining the order of your present financial records and producing timely, accurate financial reports, but your virtual CFO is your hidden asset for expansion. Your business obtains insights from a virtual CFO who has previously assisted dozens of companies just like your own in succeeding, thanks to their resources, connections, and knowledge.

In this article, we’ll examine the duties and obligations of both virtual CFOs and controllers. It will help you decide which financial management position your business requires to ensure a smoothly-run back office and financially sound strategic planning.

Virtual CFO

Virtual CFOs are in charge of managing the accounting and economic areas of an entire business. It includes financial analysis, planning, budgeting, modeling, and the establishment of policies and practices. Then these policies ensure successful financial accounting and management are maintained.

Virtual CFOs manage the finances in a manner similar to regular CFOs. They provide the senior management with plans on which you may base choices for your business. These choices may impact the company’s overall financial stability. Virtual CFOs do all of your financial processes remotely, smoothly, and seamlessly.

Here are some of the primary duties of a Virtual CFO.

Cash Flow Management

A fully managed cash flow is necessary for any business, and Virtual CFOs are experts in managing it. A virtual CFO is aware of how much money is coming into and going out of a business. They are also in charge of the systems and practices for making purchases, paying bills, establishing credit, collecting debts, and handling other financial commitments. Virtual CFOs may also deal with and distribute securities and the company’s capital.

It is crucial to frequently create cash flow projections in addition to keeping track of your finances. It contributes to a company’s long-term viability. By forecasting and projecting cash flow, businesses may estimate how upcoming actions will impact the following weeks and months. Hiring a Virtual CFO who is knowledgeable in cash flow forecasting would be helpful if you are unfamiliar with the process.

Financial Budgeting

Almost all companies have some budget for their operations. However, Virtual CFOs adopt a more thorough strategy using a budget-to-actual analysis. Virtual CFOs will uncover strategies to decrease corporate expenditures during this procedure. They will also manage inconsistencies between expected and actual performance metrics.

An excellent Virtual CFO should be able to provide these suggestions as instantly implementable actions. Additionally, virtual CFOs are skilled in managing labor costs and can help business owners determine the total cost of each person—this aids in the sensible and well-informed recruiting decisions made by business owners.

Financial Strategy

Making strategies to pay off credit lines, company loans, and other financial commitments and obligations is part of the Virtual CFO services. Liabilities in this context refer to paying for business supplies or other essentials like a leased car or other payables.

Virtual CFOs add a degree of execution, strategy, and insight that smaller or less seasoned finance teams might be unable to provide. They have a broad spectrum of experience in operations, corporate finance, and other financial matters. In order for business owners to concentrate on increasing wealth more quickly and effectively, virtual CFOs are skilled in creating a plan for enterprises to reduce their debt.

Raising Investment

Virtual CFOs frequently have close connections with other financial authorities like bankers. As a result, they can arrange finance agreements for business growth. It’s time to engage an outsourced or virtual CFO service if your business intends to raise cash, explore a merger or acquisition, or plan a strategic departure within the next five years.

Virtual CFOs will check your financial condition to make sure a transaction can be supported. Additionally, they will offer the research and knowledge necessary to decide whether the deal you seek is best for your business and your shareholders. Virtual CFO services will also aid with due diligence, negotiation, and evaluation of the final paperwork, in addition to assisting with document preparation for the transaction.

Controller Services

Controllers are in charge of overseeing the credit managers and bookkeeping employees. They also carry out tax-related duties. While a virtual controller and virtual CFO appear to perform some of the similar tasks, there is a crucial difference. Controllers often oversee everyday financial activities. Virtual CFO services focus on developing and executing broad strategies.

The controller may be valuable in supporting a virtual CFO’s everyday activities. In small firms, controllers may be highly beneficial. It is especially true if the firm owner anticipates assuming the post of virtual CFO. The skill to do many of the tasks that occasionally fall on the CFOs makes controllers worthwhile. They can assist and offer helpful financial guidance.

The subsequent hire depends on your business’s objectives due to the distinctions between a controller and a CFO. For example, you may want a financial controller if your past financials are sophisticated and require more supervision to monitor them. On the other hand, you probably need a CFO if your firm is experiencing financial difficulties or you’re focused on growth, pivots, or transactions.

Here are some of the reasons you may need a controller.

Lack of Financial Information

Controllers are responsible for providing timely financial reports and records so you can make intelligent and information-based business decisions. Since all significant business decisions are contingent on numbers, it’s essential to have someone around who can answer those questions quickly and provide relevant financial reports and information when needed.

Inaccurate Financial Reports

If your financial records are inaccurate or not up-to-date, then you are not running your business as efficiently. A decisive change you can make in your business is enlisting a controller who can provide accurate reports within a month. It helps you make more strategic and intelligent business decisions while keeping a steady pulse on the health of your business.

Out of Control Spending

If you are not confident that your team is on top of billing customers, collecting and applying for client payments, paying invoices, or keeping records updated, then it’s time to add a full-time or part-time controller to your business. A controller will monitor your current financial records and ensure spending is streamlined according to your current needs.

Wrapping Up

Controller or virtual CFO services are excellent ways to streamline your business operations and pave the way for your firm’s future. However, these services require careful planning, data, and experience, so choosing the right company to outsource your staff is crucial.

Oak Business Consultant offers controller and virtual CFO services to provide you with the expertise and resources essential to successfully growing your business. We provide professional, top-of-the-line, and affordable CFO services.

Contact us today and learn more about our virtual accounting services!