Many SMEs still make a ‘mistake’ of trying to operate without a CFO, leaving a huge void in the strategic management capabilities the business. Hiring a full-time (in-house) CFO should be a major decision for the company and it may be really costly.
When should you hire a virtual CFO?
Hiring a virtual CFO is not just about managing your future financial plans; it is also about managing your current financial well-being. The best way to think about the bang-for-buck of hiring a virtual CFO is to consider your business’s current revenue — that will help you to decide when to hire a CFO.
Why should you hire PNRC as your virtual CFO?
At PNRC, we help your business with preparing strategic budgets, reviewing KPIs, monitoring cash flows and optimising the financial and accounting processes. We work as per your business needs. Only a few hours per week can make a difference. Besides, we offer advisory service in assessing the business model to help you find out profitable or non-profitable segments.
Here are the 4 benefits of hiring PNRC as your virtual CFO:
1) Understand your profits
No doubt you’ve already got a running record of your profits and losses. But, and be honest, do you feel you have the business acumen and mathematical skills — or even the time — to know for sure how accurate your records are? Running a small business is an always-on gig, and running the business and the numbers simultaneously is difficult.
Before we, as your virtual CFO, help you in boosting your profits, we will help you in understanding them. We can help reveal which products and services are the most profitable, investigate and define gross profit margins and help you calculate when your profits will convert to cash in the bank.
When you genuinely understand your profits, where they come from and when they will hit your business bank account, you can then confidently calculate the profit you can distribute to yourself and other business owners or investors.
2. Minimise risks and inefficiencies
Market volatility, national recessions, global pandemics, supply issues — there are any number of hindrances to your small business that are beyond your control. What you can do, is prepare for them.
PNRC as your virtual CFO, will take a holistic approach to managing risks. We will make suggestions on reducing internal inefficiencies as well as managing external risks like compliance requirements with the ATO and ASIC. Of course, a business’s biggest risk is running out of cash. We will help you to build an accurate financial forecast that can predict cash flow and cash balances over time, which can assist in preparing for the ups and downs of business and market conditions. We will also keep an eye on the broader industry and national contexts or government grants to ensure that you have the right financial buffers to survive the unexpected.
3. Create financial KPIs
As per our deep expertise for every business in Australia, there are 4-5 key indicators that are relevant to your business and your industry:
- Gross profit margins
- Cash conversion cycles
- Debt-to-equity ratios
- Working capital measurements
- Sales leading indicators
Setting financial key performance indicators (KPIs) helps you to understand at a glance if your business is on track or off track towards its goals.
4. Reorganise your structure
As your small business grows or expands, many loose ends arise in the business which could lead to the instability. As a business owner, you may not be able to notice such ends at the very beginning which will shake your business structure.
We as your virtual CFO, can work with you to define an optimal organisational structure. We will help you work through structural variations to identify how to utilise your employees best. By using financial modelling and forecasting, PNRC can help you to identify the right time to hire for a new role and also model scenarios to assist in calculating what you can afford to pay to retain your best employees.
Throughout the years, we have helped many businesses of various industries to prosper. Becoming a reputable CFO is an arduous process that requires real-world experience. When you hire a CFO, even a part-time outsourced virtual CFO, the invaluable lessons they’ve learned come with them. It’s often said that data is king and the foundation of every good strategy. You are going to be benefited from our expertise and knowledge of processes in your niche.
Don’t miss out on opportunities for your business growth and get in touch with us today.