virtual cfo

Time for a Virtual CFO

Are you a start up, trying to minimise costs but desperately needing financial clarity? If you are thinking yes – then please read on.

A virtual CFO gives you access to the big business mentality but at a cost you can afford.  They give you flexibility in running your business and they are the conduit between your bookkeeper and your tax accountant. They help you make informed small business decisions.

Here are five reason’s why we need to chat.

We ensure that your accounts are accurate.

Ok. Would a CFO at a huge corporate check your accounts. Well, no. But a small business CFO should and will make sure that the information going in is correct. I can not stress enough how important accurate accounts are. If you want to grow, you need to ensure that the data is of good quality.

We listen

Turns out as a virtual CFO I am a great sounding board. We provide sound financial guidance based on our experience in small business. We can tell you what issues to watch out for and how to resolve them.

Cash Flow Management

The biggest issue affecting small business is cash flow.  We can help create cash flow models and forecasts to identify when you are going to hit a red zone. Then we can help analyse what you need to do to overcome this. What strategy should you undertake?

Technology guidance

A virtual CFO can help you make the right decisions when it comes to technology. Moving to the cloud? Changing a Point of Sale system? Inventory update? Speak to your Virtual CFO. They will have great insight into how the whole process is going to work and save you from making costly mistkes.

You do what you do best

Chances are when you started your own business it wasn’t because you wanted to be buried under the financials. Hiring a virtual CFO frees your time off so you can concentrate on your skills and we will complement you.  We can just work in the virtual space and you can focus on your core business activities.

If you want to talk about it more then get in contact and we can have a free no obligations chat and get a plan of action in place.

Data Analytics

Why data is a good thing.

In today’s technological age we have access to so much data it can almost be overwhelming. All of this information adds an extra layer of noise and can often be ignored. However, this data is amazing for your business. Knowledge is power. You can use this data to inform your decision making making smarter, better understood and quick decisions for your business.

Where can you access this data? And, what sort of data should you want to collect? What can you do after you have this information?

Have you got a Point of Sale, website, accounting system?

These are all really easy ways of accessing and retrieving information about your business.

The POS will tell you customer purchasing habits, peak service times, sales trends and which employees are your best sellers. Nearly all POS systems, even old systems will have customer reports, sales information and product data. If you have a POS you should be singling out the information you need.

Google analytics is full of powerful information about your customers and your potential customers. Especially if you are selling on your website. It will tell you the traffic sources (where your customers are finding you), how long they stay on a page for, what they are putting in their basket, what photos customers are looking at and even the demographics of your visitor. Savvy social media consultants are tapping into this market and are providing accessible training on how to read your analytics. It’s brilliant information when used correctly.

Lastly, the accounting system. Your financials will give you the quantitative information and with integrated systems it can give you greater detail. The accounting system will provide you with the financial trends and data. It will demonstrate what is and isn’t working for your bottom line.

You can even grab data off your phone. Your social media accounts are packed full of interesting information.

Other ideas include;

  • Industry associations and magazines. Often they have benchmark data that you can use.
  • Australian Taxation Office also releases benchmark information and other data relevant to your industry.
  • Customer surveys. This can be done after a purchase has been completed on your web page, use free tools such as survey monkey or even just capturing a post code once the sale is made will give you a key idea of where your demographic lives.
  • Social analytics. Instagram, Facebook and Linked In let you know really interesting insights. Instagram tells you when your audience is watching and what is the peak time to post and even what they are actually looking at.
  • Customer Relationship Management. Sales funnels, sales trends, customer profiles. This data allows you to narrow and specifically target your sales campaigns.
  • Loyalty programs / reward points. Who actually uses the points and what do they buy them on?

You need to consider about what type of information you want to gather. It should ideally link back to your KPI’s, strategic plan and management goals. This data you have collected allows you to measure how you are tracking in your business. You may use the data to examine entering a new market space or perhaps you will use it to determine a change to your existing product mix.

Your accountant or business partner is an invaluable asset to help you navigate the options and to analyse and identify the key trends that emerge from that data. They can help you customise a unique dashboard, they can provide worthwhile management reports to give you trend information and together partner with you to determine the next steps for your business.

Small business tips

Solving Your Problems

As an accountant we love to solve your problems. They don’t even need to be financial problems. Accountants are not just good with numbers, they are usually good at business. A common misconception is that accountants are tax nerds, sure that’s one branch of accounting but don’t forget all the other avenues we can take with our accounting degree.

Strategic management accounting, business analysis and performance review is a necessary function to controlling your business and ergo, your financials.

How do you go about solving a problem?

If you have the ablility to access a Financial Controller, Business Manager or accountant should approach your problems as opportunties to learn, innovate and create solutions.

CPA Australia release a weekly podcast for free that can be accessed via iTunes or the podcast ap on your phone. These are great tools for professional development. A recent podcast addressed this very issue of problem solving hence my post today!

When you are presented with a problem in your business you can change the way you handle and solve it.

You can ask yourself the five why’s- why, why, why, why, why? This traditional technique can help map out the challenges and a path to resolution.

The second approach is to change your perspective. To relook at the problem in a different way. The following example can be considered; if you come to me and say I am not making any sales we could rephrase this as
– my customers aren’t buying enough
– my sales people aren’t selling enough
– my competitors are beating us

and in changing the narrative you have three different solutions to the lack of sales. This might be expanded to

My customers aren’t buying enough on our web store?

  • Is our digital strategy right?
  • Have we got the optimum amount of traffic?
  • At what point has the customer stopped committing to the sale?
  • What is the barrier to the sale? Credit card, internet to slow, price too high?

Now we are creating a strategy to deal with the simple question of why am I not selling enough?

If you think you have some problems I can help with then lets catch up for a virtual coffee and a chat! Solving problems is what I love to do!

Small business tips

The Balance Sheet

Balance Sheet. You know, that other financial statement in your software you probably don’t look at. Two words that cause eyes to glaze over.

I promise you the Balance Sheet is one of the most powerful tools you own in your business.

Why though?

The P&L only articulates one part of your business story. Yes, it tells you if you made a profit but not the whole narrative. The most common concern I’ve heard is “I am making a profit but we don’t have any cash!”

When you view your business through the balance sheet you develop a greater understanding of true financial position – do you have enough cash to run your business, are your assets generating enough income, are you making sales but your receivables balance is all in 90 days? What are your tax obligations? Are your debts helping you generate income to cover the repayments? I also love a good provisions account – especially an annual leave one – this will tell you if your employees are banking up leave that if they resign you are going to have to fund. Can you do it?

Andrew Codd posted on Linked In about the Balance Sheet Mindset and Cash Flow Mindset for three way thinking in your business. Successful businesses invest in not just making the quick sale but developing assets such as new systems, new products, refreshing your brand and understand how to best utilise your net assets.

Moral of the story? Equilibrium in your business is essential for achievement. If you are only looking at the P&L and wondering why you aren’t kicking goals you may need to change your mindset and develop new indicators to honestly measure success.