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CFO – A luxury or necessity for start ups |
2016 will be a critical year for the sustainability of startups. With due respect to all, very few companies were able to lure investors while others lacked in the race. The markets have been volatile for startups. Company founders and CEOs are rarely equipped to handle financing strategies, budgets and dealing with investors. If your company’s revenue is growing quickly and/or you have new investors and/or you’ve received venture capital, it is indeed the time to hire a CFO.
A CFO is best suited to handle rapidly increasing growth due to the complexity involved. As growth occurs, the company and its key customers, suppliers and employees will face new risks. Managing risk involves not only having insurance, but the CFO must also protect the company from regulatory, taxation, environmental and human capital risks.
But bringing on a chief financial officer is not cheap. Let’s face it!! Small companies cannot afford a full time CFO. Any competent CFO will not be willing to join at anything below the salary range of Rs. 25 Lacs to Rs. 50 Lacs per annum. Now what’s the Solution? – A VIRTUAL CFO.
Virtual CFO helps you navigate those challenges effectively by providing professional advice, analysis and support to management. Following are few benefits of hiring a virtual CFO:
- A virtual CFO can instill sound financial disciplines.
- Grow and move into new markets.
- Improve overall productivity.
- Increase your competitiveness.
- Minimize the risk of business failure.
- Improve its success and value.
- Manage its tax and compliance obligations.
- Works on a part-time basis and hence cost effective
Virtual CFO services are generally customised for every business but commonly the following is included:
- Analysis of pricing and product or service decisions
- Bookkeeping
- Company Secretary duties
- Creditor payments
- Design and refinement of internal accounting systems
- Developing budgets and financial forecasts
- Developing and monitoring of Key Performance Indicators
- Ensuring effective use of cash
- Financial modelling (sales projections, break-even analysis, cash flow analysis)
- Full payroll function
- Human resources advice
- Information technology strategy and advice
- Maintaining your data integrity by keeping your accounting records up to date
- Negotiations with banks and investors
- Proactive and tailored business advice
- Sales and marketing advice
- Sales invoicing and debtor management
- Selection of appropriate software
- Strategic business planning
- Strategies based on industry specific and best practice benchmarking
- Timely delivery of management reports.
So what are you thinking about!! Go and hire a virtual CFO for your business and keep your financial worries at bay.
CA Ankush Garg
M R Garg & Associates
Chartered Accountants
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