Problems that might occur when delivering Virtual CFO services and the Possible solutions

It’s a great feeling to finally have a CFO on board who can guide on decision- making and strategy.

You are happy that this person will take your company forward with you.

Most of the times Virtual CFO’S really do the job deployed to them and add tremendous value to the company tangibly as well intangibly

However, there are situations where certain problems can arise in Virtual CFO service engagement.

Below are the problems and possible solutions

Deliverables not completed on time

 At the beginning of Virtual CFO engagement there is lot of expectation from the clients as they are excited.  Scope, deliverable and time-lines are agreed between the client and Virtual CFO service provider.

At times during this process, client experiences delay in the accomplishment of work tasked to CFO.

The reasons could be numerous, but in our experience, most of the times below are  reasons for delay

1. Huge variance in estimation vs reality of task to be completed
2. Client not supporting the engagement whole-heartedly
3. Lack of data, information not provided by the client’s staff

Below are the possible solutions:

Huge variance in estimation vs reality of task to be completed: 

When typically a CFO is appointed, most of the times it is sort of business transformation exercise unless the scope is very transnational in nature.

Therefore, in our experience when scope is  drafted in consultation with the client, the variance in the estimated vs actual work is quite less.

This can be achieved by implementing following process:

• Discovery meeting with client to understand the exact need
• The need assessed should be further validated by a diagnosis in specific areas of business
• Post this analysis draft scope of work should be submitted to the client along with the time-lines
• Client should give input so that all parties are on the same page.

Client not supporting the engagement whole-heartedly:  Business owners tend to suffer from shiny object syndrome. They get excited in the beginning, but gradually lose the enthusiasm that they had .

To over-come this, client need to be educated that availing CFO services is like investment in shares or stocks for long-term.

The returns from CFO services are not immediate but rather they accrue to the company over a period of time (Unless the engagement is purely restricted to tax incentives exploration and implementation)

This fact has to be brought to the notice of the client at the beginning  of the engagement so that client understand the value of the engagement and support the entire tenure of the engagement with whole heart

Lack of  data, information not provided by client staff :

This is one of the major reasons why the work is not completed by CFO’S.  They have to rely heavily on the client’s staff for reports, number, data and relevant information.

Lot of times we have seen when information is not provided in time resulting in unnecessary tension between the client and the service provider. Despite all the good intentions, the business goals and deliverables are not achieved

Below are the possible solutions:

• The CFO should be supported by his own team who in turn can work with client’s staff on ground and ensure that information reaches on time.
• The CFO could deploy full-time resource at the client’s office. This way the deployed resource will be working very closely with the client’s finance and accounting team leading to accountability and responsiveness

The above two approaches have worked quite well with our Clients

Lack of Continuity

Lot of times CFO services are delivered by freelancers or by a single resource from the service provider. This model works provided everything goes as per the plan.  However the engagement suffers when services are interrupted when the CFO is temporarily not available

The whole engagement comes to stall.

So how to overcome this problem:

• At the outset, it is highly recommend to hire a CFO service provider that also have other CFO’S in its portfolio, so that in case of emergency, one CFO can take place of another one.
• If it is not possible, then at least it should be ensured, that CFO services are delivered by team of people rather than the individual person. This way client can count on the other person, if any exception occurs.
• Practice of having weekly or biweekly progress report from the service provider. This way client keeps track progress of the engagement

Limited Knowledge

Problems also arise when the CFO deployed is an expert only in few specialties like taxation, accounting but not an expert in other fields.

In such a situation the value will be not delivered completely and goals are not achieved.

Therefore to overcome this, companies should hire service providers who  have experts in their firm to support the CFO engagement.

If you are looking for a Virtual CFO service provider, you can reach out to us at info@soatech.in