Virtual CFO Services
On an average in India ten thousand companies are being incorporated in an year. Once a company is incorporated, there are a number of compliances and procedural aspects that come into place. As finance plays a major role for a company right from it’s infant to senescence age management of it is to be treated with utmost care.
A Virtual CFO typically handles various areas like Accounting and payroll management, GST, Income tax planning, corporate compliance functions, Treasury management, Budget preparations, funding decision and liaison with external government agencies and investors. However, the strategic and financial functions performed by him are essential for every company to grow.
Appointing a CFO is requisite for every enterprise to handle the above functions effectively. A Virtual CFO would perform equally or more effectively than an in-house CFO since a team of professionals handling the regulatory or procedural aspect would be dynamic than a single person and they have an idea of the functioning of the dynamic business models.
- Review of accounting and payroll process management.
- Implementation of ERP and structure for bookkeeping.
- MIS to top-level management and business analytics.
- Providing budgeting, forecasting and sensitivity analysis.
- Compliance support w.r.t, Foreign Exchange Management Act, Income Tax Act, Companies Act and GST.
- Understanding the business model and identify avenues for tax planning
- Support for business plans, and help in valuation of the company and due diligence support
- Liaison with the investors for funding
- Defining capital structure between shareholders and maintain of Cap table
Virtual CFO would provide all the services that are provided by a full-time CFO. A virtual CFO is suggested for start-ups, MSMEs or growing companies since these companies do not require a full time in-house CFO. A virtual CFO would only charge for the time and service he has dedicated to such entity.
CFO may not be necessary initially but if you are growing fast or planning to raise funds, the procedural aspects would become complex with the growth in business. Hence to handle the company in that stage a CFO would be needed to provide stronger insights for company’s financial performance. To serve this purpose a Virtual CFO could be appointed.
Due diligence is a review conducted by various professionals based on the requirements, professional like Chartered Accountants, Company secretaries, Registered Valuers, FEMA consultants, International taxation consultants, Legal experts, Chartered Engineers and other professionals would be required to handle this holistically.
A virtual CFO may not be needed if you have an accountant or a controller, who provides you with, insights for financial performance, MIS to the top-level management, creates strategic plans, provides with business plan structures for financing and who can effectively present before the bankers and investors for funding. In case your controller cannot handle the above jobs, a Virtual CFO would do that for you.
The actual concept of virtual CFO is that, the person would not be needed on a daily basis. As the staff would handle day-today activities, CFO would be needed only when his inputs are required as and when needed. Hence, in such case, Virtual CFO would be cost-effective as he would raise an invoice only when his services are taken.