cfo

Engaging a Virtual CFO

Outsourcing your financial function

Not all businesses need (or can afford) a full-time head of finance. But, in addition to accurate and regular financial reporting, they need a strategic view of finance, whether that means budgeting, business planning, forecasting, fundraising, financial modelling, acquiring a business and so on.

Outsourcing is a common way to save overhead… and ‘remote work’ is increasingly accepted in business culture. This has led to more businesses engaging a CFO on a part-time or contract basis. They collaborate with the bookkeepers, accounting team and management so the finance team can make a critical contribution to the development of the business.

An outsourced CFO is usually paid on an hourly basis or by a monthly retainer. This is a modest investment compared to a full-time hire which could involve a six-figure salary along with expensive benefits.

What should you look for in an outsourced CFO?

  1. Communication skills: Essential because the candidate will need to quickly get up to speed on your business, challenges and opportunities. They will also need to interact effectively with all stakeholders in the finance process, both senior and junior. On top of this, they may work remotely… which increases the need for exceptional communication skills.
  2. Experience as a CFO: You are looking for someone who can QUICKLY be effective. Yes, they will require some training on your business but they should have significant (think 8 to 10 years) experience in the field and be up-to-date on the latest tools and best practices.
  3. Vertical expertise: Your market and industry will also require some expertise. A CFO who has worked in multiple industries may display the ability to quickly learn new industry practices. (On the other hand, they may have tried and failed in those industries and the opposite may be true!!)
  4. Network: An effective outsourced CFO should have built a network of specialists, advisors, executives, potential employees and vendors who could add value to your business.
  5. References: Look especially at references who speak for the candidate’s work as an outsourced CFO in your industry for a business at a similar stage of development.
  6. Education: While this is not a requirement, most CFOs have a bachelor’s degree and/or an advanced business or finance degree. CPAs and other financial designations are also common.
  7. Your own unique needs: Be really specific here. For example, perhaps you require certain ‘soft skills’, flexible hours, fast response times, research capabilities, proactivity, the ability to challenge management, fresh ideas or a long-term commitment to mirror a long-term project underway.

How do you find an outsourced CFO?

You might find candidates through job boards, workshops, referrals or your network. Some agencies specialise in outsourced finance roles and they may have access to a larger pool of qualified candidates. As it happens, Notch Above is a bookkeeping provider offering CFO services and we have the advantage of already understanding small business.

Ideally, you want to consider at least three candidates for any role

Make sure you finalise a clear scope of work in advance and then allocate time and resources to onboarding. Time spent upfront familiarising the candidate with your business and needs is time well spent. And it sets the candidate up for success. After that a regular check-in with clear reporting lines is essential.

When is an outsourced CFO successful?

With clearly outlined objectives, detailed reporting and a regular meeting schedule, all parties will know how results are measured and evaluated. There’s also value in flexibility because goals and needs will inevitably evolve.

A final thought

Be ambitious! An effective outsourced CFO is a strategic hire and can have a massive positive impact on a business in terms of growth and profitability. Aim high, get results and don’t accept platitudes or excuses!

Need help with strategic financial decisions? Get in touch with Matt Salisbury at Notch Above on 1300 015 130 or read more here »

man on computer

Ensure super guarantee payments arrive on time

Ensure Timely Super Payments by Verifying Clearing House Processing Times

Check your commercial clearing house processing times to ensure your super payments arrive on time.

As an employer, it’s important to check your clearing house processing times to help ensure you meet your super guarantee (SG) payment due dates. Processing times vary and some clearing houses can take up to 10 days to process payments.

The super contributions you make for your employees are only considered ‘paid’ when the super fund receives them, not when your clearing house receives them.

If the super fund receives your payment after the due date, you’ll need to lodge a super guarantee charge (SGC) statement and pay the SGC or penalties may apply.

Find out more information on super payment due dates.

Need payroll help for your business?

Notch Above Bookkeeping are Certified Xero bookkeepers offering agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero payroll services and get in touch on 1300 015 130 to discuss the plan which best suits the needs of your business.

Source: ATO

remote worker webinar

Strengthening Financial Controls for Remote Workers

9 Ways to Strengthen Financial Controls in a Remote Work Environment

Employing remote workers presents additional challenges related to financial controls.

Managers and employees may not believe they are at risk but studies by the Association of Certified Fraud Examiners show companies with fewer than 100 employees are more likely to lose money to fraud.

Business owners need to demonstrate the importance of improving financial security and minimising risk. Here are measures to take.

1. Clear Policies and Procedures

The starting point is to develop comprehensive policies and processes for financial transactions, expense reimbursements and approvals. Each business is different, but these policies may:

  • Eliminate or minimise the need for in-person interaction, which is obviously a challenge for remote workers
  • Require proper documentation and validation of expenses incurred by remote workers, like submitting invoices and confirmation of payments made
  • Provide banks with a list of payees so that payments to a recipient NOT on the list require additional approval
  • Limit the number of authorised signers and lower their approval thresholds, especially where there may be reduced oversight of remote workers.

2. Virtual Training, Education and Teamwork

A heightened risk involving remote workers occurs when a “bad actor” sends an email that appears to come from a senior employee requesting that a payment is processed, along with a false justification. Remote employees are more prone to these scams, partly because there is no easy way to ‘gut check’ these situations. To reduce risk:

  • Train remote workers on financial controls, fraud prevention, and cybersecurity
  • Provide access to a contact person for questions or concerns regarding financial matters
  • Consider additional rules like requiring remote employees to call someone who makes a payment request and/or limiting the number of people who can process payments.

3. Use of Secure Technology

Pay particular attention to the technology used by remote workers, for example:

  • Update spam filters, firewalls and security applications that protect against malware
  • Utilise secure and encrypted software for financial transactions, online banking, and data storage
  • Require a unique login AND multi-factor authentication (MFA) for any portal or system that allows employees to approve or process payments
  • Ensure digital payments create an audit trail: Who approved which payments and when?
  • Consider email encryption for sensitive information such as sales or financial data so only the intended recipient can see the message and attachments
  • Implement a data backup and recovery plan to safeguard financial data in case of a system crash or cybersecurity incident.

4. Segregation of Duties

Implement checks and balances by separating responsibilities among different remote workers. For example, a person handling financial transactions should not also approve them.

5. Limit Access to Financial Systems

Grant remote workers access to financial systems and data only where absolutely required and regularly review and update access permissions as responsibilities change. Create roles with various permission levels in systems, then build supporting workflows to manage the necessary approvals.

6. Revise Processes Frequently When There is High Employee Turnover

High Employee Turnover usually means a change in responsibilities that could impair or break a key control. Pay close attention if the business has eliminated positions, because disgruntled former employees may be more likely to commit fraud or otherwise harm your business.

7. Mandatory Reporting

Encourage remote workers to report any suspicious activities they come across, providing an anonymous reporting mechanism if needed.

8. Conduct Background Checks

Perform thorough background checks during the hiring process to verify the credentials and integrity of remote workers.

9. Make Adherence to Financial Controls Part of Performance Reviews

Build financial responsibility and compliance into the culture by making it a part of remote workers’ performance evaluations.

Financial controls are not new in business… but increased remote work presents new challenges. Assess the risk in your business and take decisive measures to improve financial security.

Need bookkeeping or payroll help for your business?

Notch Above Bookkeeping are Certified Xero bookkeepers offering agreed-price monthly fees so you know exactly where you stand. No hidden extras and no ticking clock. Browse our range of Xero payroll services and get in touch on 1300 015 130 to discuss the plan which best suits the needs of your business.