Make the most out of working with your numbers person by asking these questions!
Whether you’re looking to hire a financial expert or already have someone on board, getting answers to these questions will help ensure that you understand what’s happening in your business.
For small businesses or startups, hiring a full-time numbers person, such as a chief financial officer, might not yet be feasible. Here’s where engaging in a Fractional or Virtual CFO (VCFO) service makes more sense.
A VCFO performs the same function as any CFO but in a third-party capacity. They plan, implement, and manage all the company’s finance activities, and they also play a supportive role to the CEO.
Essential Questions You Should Often Ask Your VCFO
1. What is our cash position?
Whichever way you look at it, one of the most critical resources in a business is cash. As a business owner, you must have a clear sense of your company’s cash position. Monitoring your cash position daily or weekly will help you understand the ups, downs and cycles of cash in the company. It will give you the ability to manage your business’ finances better.
A VCFO can provide you with reports to show you where your business is standing (cash-wise) at a certain period. They can give you insights to determine what you would do if you have extra cash or cash flow issues.
At Cloud CFO, we could help you set up accounting tools like Xero so you can conveniently access up-to-the-minute information on your cash position any time you want.
2. How can we improve on cash flow forecasting?
As you know, maintaining a good cash flow is as important as driving in profits. It could be possible that a business is profitable but have no cash to meet its financial obligations, so an efficient cash flow forecast is critical.
Understanding where cash is coming in and out of your business at a particular time is critical to your success.
A VCFO has the expertise of creating cash flow forecasts, which you can use as a guide to operating your business on a day-to-day basis effectively. Come to your numbers person and ask them to look at your projections to see where it could be improved and increase its accuracy.
Also read: Improving Your Cash Flow: Tips For Small Business Owners
3. What are the biggest concerns I should target?
Despite being hired as an outsourced employee, a VCFO will play a significant role in your business. They help you establish visual dashboards and produce reports to monitor essential metrics quickly and gauge your company’s performance.
Besides this, a VCFO is a person you can ask what trends are emerging and which ones need your attention. They will provide you with critical insights so you can make necessary adjustments and make financially sound decisions.
4. What key metric is the most important?
Most likely, you already have a few existing metrics that you monitor. To further optimise these, you should identify what your most important metric is.
Having an overview of your company’s day-to-day operations and a deep understanding of your finances, a VCFO can help you identify which key metric you should focus on.
5. What should we do differently?
A VCFO is more than someone who remains on top of your financials; they are partners that help you grow your business. Be open to asking what could you do differently. Use their experience of working with other companies from a variety of industries to your advantage.
When you’re working with VCFO, an accountant or bookkeeper, it will be beneficial for your business if you take the time to sit down with your numbers expert to ask these critical questions.
If you are still looking for a financial expert to be part of your team, Cloud CFO offers customised VCFO services designed for startups, digital and creative businesses that don’t yet have the budget for a full-time CFO.
Book a time with us if you would like to know how we can help you.