Virtual controller and CFO services are becoming more popular for scaling small businesses. Both offer similar services, so it can be challenging knowing which option to choose for your business.
If you want to benefit from outsourced virtual services like controllers and CFOs, but you’re not sure what works best for your business, we’re here to help.
Here’s the lowdown on a controller vs accountant virtual services and what sets them apart.
A VCFO stands for a virtual chief financial officer. VCFO is in charge of managing the accounting and economic areas of an entire organization. This includes the establishment of policies and practices that ensure successful financial accounting and management are maintained.
Here are some of the primary duties of a VCFO.
Cash Flow Management
Well-maintained cash flow is essential for any business, and VCFOs are experts at managing it. A virtual CFO knows where the money is flowing from and where it is spent in a company.
They are also in charge of establishments and procedures for bill payments, purchases, credit and collections, and other financial obligations. Tending cash flow is the central aspect of a VCFO’s role.
A VCFO may also oversee creating a model for accounting policies and procedures. They may also handle and disburse business funds and securities.
As well as tracking money, setting up cash flow projections regularly is essential. This helps to ensure the long-term viability of a company.
Forecasting and estimating cash flow helps businesses predict how current decisions will affect the company in the coming weeks and months. If you don’t know how to produce cash flow projections, then hiring an expert VCFO will help.
Most businesses have some type of business budget. However, VCFO takes a more comprehensive approach by implementing a budget-to-actual analysis. During this procedure, the VCFO will discover ways to limit business expenses. They will also manage discrepancies between projected and actual performance indicators.
A decent VCFO should be able to give these recommendations as actionable measures that can be implemented immediately. VCFO’s also have the expertise in labor cost management to assist business owners in assessing the entire cost of each employee. This helps business owners make rational and informed hiring decisions.
This part of VCFO services involves making strategies to pay down lines of credit, business loans, and other financial liabilities and obligations. In this sense, liabilities refer to paying for company equipment or other necessities, such as a leased vehicle or property.
VCFOs know how to produce a debt reduction plan for companies so business owners can focus on growing wealth sooner and more efficiently.
VCFOs often have strong relationships with other financial experts, like bankers. Due to this, VCFOs may negotiate financing deals for business expansion. In some cases, the VCFO may also be responsible for managing a business’s investments and offering stock option incentives.
Controllers are otherwise known as comptrollers. They are in charge of managing bookkeeping staff and credit managers. They also conduct tax functions.
While some of a virtual controller’s functions seem to be the same as a VCFO, there is an essential distinction. Generally, controllers manage daily finance operations. VCFO’s focus on producing and implementing big picture strategy.
The controller can be an essential asset in assisting the daily operations of a VCFO. Controllers can be especially helpful in small businesses. This is especially when the business owner is likely to take on VCFO responsibilities into their role.
Controllers are helpful as often they have the expertise to take on many of the functions that sometimes befall CFOs. They can provide valuable financial advice while helping with staff management.
Typical duties of a controller include:
- Overseeing bookkeeping staff
- Fiduciary responsibilities of company finances, such as signing checks and signing off on financial reporting
- Producing policies and processes for financial management
- Creating financial reporting
- Managing insurance and risk management
- Protecting financial assets
- Maintain accounting accreditations and continuing education
- Give you peace of mind and freedom to focus on your company
- Preparing budgets and offering financial advice to small business owners
- Developing and implementing tax strategy
- Maximize and support staff conducting accounting duties
- Visit Accounting Technology conferences
- Selecting suitable financial software for the business
- Pursuing collections
- Recruit, employ, background check, and train accounting staff
- Taking care of staff records
- Working with HR to inform staff on company benefits
- Review and close accounting periods so company staff can assess the financial performance of the company and make informed decisions
Many outsourced controller services work to suit the specific needs of a growing small business. Controllers are often in charge of managing client accounts, providing financial advice and helpful insight, and carrying out proactive account management.
Which of These Virtual Accounting Services Are Right for You?
VCFO and controller services are an excellent way to provide extra value to your small business and to pave the way for the future for your firm. However, these services need careful planning, data, and experience in the field. That’s why choosing the right company to outsource your staff is crucial.
Here at Sterling Tax and Accounting, we’re here to help. We offer controller and VCFO services to provide you with the expertise and resources essential to help you grow your business into a success. Now you know more about the differences between VCFO and controller roles, learn more about the virtual accounting services we provide.