CFO Services

Virtual CFO vs. In-House CFO: A Guide for Your Business

Written by Analytix Editorial Team | January 20, 2023

A chief financial officer (CFO) is a top-level executive who, as a financial controller, handles everything related to cash flow and financial planning. A CFO is often the highest financial officer in an organization and plays a vital role in the company’s strategic initiatives. The CFO is also in charge of taxation issues.

The CFO of a company plays a significant role in the business’s sustainability and success. Besides being a custodian of the company’s finances and ability to spend and invest, the CFO also helps steer business growth. Their inputs guide short-term and long-term goals while ensuring the company’s operations contribute to growth and financial independence.

However, for fast-growing businesses, these expectations may not be aligned with the reality that comes with challenges such as:

  • A lack of adequate resources in-house to take care of all operational requirements.
  • Budget restrictions that prevent the hiring of additional resources.
  • Hiring, training, and retaining staff, including paying salary benefits, etc., can quickly prove costly for a startup or a fast-growing business operating on a tight budget.
  • Time constraints and the need to multi-task can take the CFO’s attention away from the more critical tasks of insightful strategy-building and guiding the company’s budget.

According to Gartner, finance leaders are plagued with uncertainty and time constraints and spend 25 to 50% of their time navigating unfamiliar situations. While they face internal and external pressure to steer the organization to grow and deliver on financial expectations, only 20% of these leaders manage to be effective in both areas.



Enabling Better Sharing of the Workload

Getting the proper assistance with workload can be tricky. No boilerplate solutions exist, and every small, well-established, or fast-growing business requires customized insights. As a result, not just any in-house resource can take over the role of the CFO. Instead, a trained virtual CFO or outsourced CFO services can help bridge this gap effectively.


In-house CFO

Virtual CFO

The company must actively seek out candidates and hire suitable contenders.

A skilled CFO is available to begin working on requirements immediately.

The business will need to train the new hire to understand what is expected from them.

Not much training is needed; clear communication on the company’s expectations will be made to the services provider.

Needs a dependable infrastructure, including computers, access to information about clients, communication, and access to sources of information.

Comes backed by the proven and reliable infrastructure of the provider.

They can deliver on expectations if they find balance, support, and assistance with their operational duties.

A virtual CFO brings industry expertise, knowledge, and understanding of current industry best practices. They can start contributing insightfully to the business.

Business needs to invest time and money in adequate assistance to in-house resources, including CFO, to ensure they can contribute optimally.

Virtual CFO is backed by the provider or partner’s proven systems and expertise.

CFO is eligible for paid leave and other benefits, including health and retirement plans, as legally applicable. It can prove to be financially challenging for a company that may be facing budget restrictions.

A virtual CFO helps businesses save money. A virtual CFO can also provide scalable services where the business needs to only pay for services consumed.

Can work alongside other in-house resources to achieve strategic business goals and ensure operations are aligned with the goals to drive growth.

It helps free up in-house resources that can be used to focus on business-building activities. This includes helping in-house resources shift their focus to building additional revenue streams or newer pipelines to drive business growth.

Needs to be responsive and think on their feet where needed.

They are highly responsive and can assist other staff members and other aspects of the business since they are trained to understand finances and how this can influence other business aspects, such as investment decisions.

An in-house CFO drives productivity and profitability but needs time and expectation-setting to optimize their contribution.

Can hit the ground running when it comes to contributing to productivity and profitability without incurring additional time or cost expenses on behalf of the business.

A skilled virtual CFO can help businesses that may be starting up or expanding but may not yet have the budget or resources required to invest in an internal, full-time hire. This also helps businesses that may not need the services of a full-time CFO but need just enough inputs to help streamline existing operations while allowing the owners and operators to increase profitability.

Next Steps

Written by

Analytix Editorial Team
Analytix Editorial Team

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