How you name your offering will have an impact on what your clients expect and the value they assign to your service. Whilst outsourced finance function, virtual finance office, financial outsourcing and VCFO are sometimes used interchangeably, choosing the right name for the level of support provided can help you set expectations around your position in your client’s business.
An outsourced finance function (or virtual finance office) generally handles all operational finance tasks within a business, absorbing the stress and day-to-day responsibilities so the client can concentrate on growing and managing their business. This can include services such as management accounts, submission of VAT returns, bookkeeping, credit control, payroll and supplier payments.
With an outsourced finance function, whilst cash flow forecasting can be included, the decisions made off the back of this such as when to hire a new employee and when to move to a new office generally still sit with the CEO.
A virtual CFO (also called a VCFO, fractional CFO, virtual finance director or virtual FD) tends to be a more strategic service that advises the business on the timings and best approach to decisions around managing and growing the business. The frequency of meetings and areas of discussion are key differentiators that can elevate your service to VCFO level.
Additionally, a Virtual CFO can sit on top of a Virtual Finance Function. This ensures the financial health of the business whilst providing the VCFO and the business with up-to-date information to help with decision-making.
You might find that within your client base, you have a demand for a mixture of virtual finance services. The right option for your clients will depend on your relationship, your expertise in their industry, the resources your client has in their team and the level of strategic support they need.
Having a few different virtual/outsourced finance packages available will allow you to better support your clients and price your services more accurately.
We've put together a guide to launching and growing a virtual finance function your clients will love, you can download your copy for free here.