The virtual CFO has a valuable role to play in a growing business. A key part of that role is to provide leadership within the critical planning, monitoring and analysis areas.

The virtual CFO will assess the processes, resource requirements and the means for disseminating important information to key decision makers. This requires the following to be achieved:

  • Buy in from management

  • Agreement on resource support

  • Discipline in maintaining a focus on the documented plan

With many years’ experience in this area, the virtual CFO will have built up an intrinsic understanding of what will add value and what will just “spin the wheels”.

Once these three requirements have been achieved, the business will be well positioned to unlock its true performance potential.

Management Buy in

Owners and key managers of growing SME businesses have often achieved good outcomes by managing based on some proven principals and by using their well honed instincts. But this can be quite a reactive style. As the business grows, this management style starts to struggle and the operational issues (problems) start to grow and absorb a lot of important resource.

The virtual CFO will demonstrate to owners/managers that the planning, budgeting and monitoring processes will enable them to introduce a proactive management style into the business. This will further enable them to build greater levels of accountability into all levels of the organisation.

Resource support

Once the buy in process is achieved the business needs to address the level of resource requirements to support the processes. Will the business management applications support detailed reporting and analysis? Is the general ledger design appropriate? Are the transaction attributes consistent with detailed analysis. Are all transactions entered and coded accurately? Are there reliable processes in place for recognising unaccounted for liabilities, prepaid expenses, work in progress valuations, and so on.

The virtual CFO will address all these issues and make ongoing recommendations to management.

Discipline and focus

Once reporting and analysis systems are in place the virtual CFO will focus on adding value by supporting management in the use of and interpretation of the business reporting and analysis.

The virtual CFO will place a lot of importance on delivering reporting and analysis formats that engage management and truly add value for decision makers. Even after this is achieved, it is important to direct management focus onto the outcomes being reported on.

By doing the business can avoid the “double whammy” trap of:

  • having more and more demands placed on limited resources, and

  • having management losing focus on the plan as it responds to the “issues de jour” (distractions to the business plan)

Naturally, all businesses need to respond to changes in teir competitive environment, but this will be a process that incorporates changes to the business plan and review of the consequent impact on the supporting budgets.

3S Synergy Group is a member of the Association of Virtual CFOs