Concierge, Virtual or Fractional CFO? What for? Who needs one?
Is this concept new? With the speed the world is changing we all need some guidance, and the “concierge” CFO is the one that will jump right in when that time comes. A concierge CFO holds a senior financial role in organization, provides strategic guidance, oversees an organization’s financial health, performance, and operations, offers financial insight and guidance, works remotely or in office relying heavily on current technology, and is fractional.
Some initial Concierge CFO services could be but not limited to creation of a business plan, a one- to three-year forecast, an initial financing budget, a cash flow forecast, business set up and legal or tax compliance.
Further a concierge CFO could provide finance operations strategic services such as: revenue models for start-up phase, cost analysis, strategic focus, supplier insight and determination, defining sales channel, and partner to test your strategic ideas.
Some services could be provided by a concierge CFO however is worth considering specialty and level of expertise required for certain services; such services would be the selection and implementation of general ledger use, initial accounting set up and, preparation of formation documents for registering with, federal and state jurisdictions, fundraising advisory, insurance advisory, preparation of statutory accounts.
The growing demand for the concierge CFO is undeniable. Here are some factors affecting the demand of the concierge CFO: global technology changes, lower cost and more data, changes in capital raising structure, changing business models, business demographics.
The primary area of change is global technology. Accelerated change from the “work somewhere” to “work anywhere”, File storage, ways of virtual communication via video conferencing and screen sharing. It is undeniable that during the last two years most likely you have adopted new technology. What technology changes have you adopted? Accounting software changes? Communication and meeting software? Document execution and sharing software? Or are you planning some new adoption soon. All changes come with a cost, and sometimes is removing yourself from the day to day and focusing on a new implementation, but before that is taking the time to decide what the right tool / solution is. Think about it, that’s when a concierge CFO is the mist helpful.
Aligned with technology transformation significant area of change is having access to options for lower cost and more data and all of that is available through evolved state of the art accounting industry technology changes, migration from on-premises to SaaS, lower cost of more robust accounting software solutions, low-cost, third-party products to complement accounting systems, financial institution digital investment.
Creativity in changing business models- Drivers highlight lower cost of entry, employee/nonemployee mix, migration of some services to commodity model (including bookkeeping as a service), innovations breed new models agile/rapid innovation. Some business model that supports this concept are Solopreneurs with nonemployees, contract manufacturers, services as commodities Micro manufacturers (Etsy), Outsourced distribution and fulfillment (Amazon), Advisory boards for big and small companies, On the horizon — Potentially newly defined worker (sharing economy)
The Concierge CFO will provide services aligned with AICPA Code of Professional Conduct which summarizes the following: public interest first, act with highest sense of Integrity, objectivity and independence, due care, scope and nature of services specified and documented.
Under the AICPA code — Independence Rule an advisor CFO is not required to be independent but required to be objective (AICPA code – Part 2 Members in Business) and use Integrity and Objectivity, General Standards, Compliance with Standards, Accounting Principles, Acts Discreditable.
I will leave you with the key points:
Large companies and small companies require Concierge, virtual, fractional CFO services, but on a different scale.
Demand for concierge CFO services is growing due to technology, lower cost of entry, changes in capital raising structure, changing business models, and business demographics.
Concierge CFOs are subject to the AICPA Code of Professional Conduct, Part 2.
Defining scope is crucial and challenging
