In the fast-paced world of construction, having a knowledgeable and experienced financial professional to guide you through complex business decisions is indispensable. From managing your finances to strategic planning, a Chief Financial Officer (CFO) plays a crucial role in ensuring the financial health of your construction company. However, the question arises: should you hire an in-house CFO or consider the option of a virtual CFO? In this blog post, we’ll explore the benefits of hiring a virtual CFO for construction companies and how it compares to having an in-house CFO.
The 5 Benefits of Hiring a Virtual CFO for Construction Companies Versus Going In-House
1. Virtual CFOs are Less Expensive
In-House: Hiring an in-house CFO means taking on a full-time employee, which comes with a range of expenses. You’ll need to provide a year-round salary, benefits, and cover human resource management expenses, including training costs. Additionally, in-house teams require their own accounting tools and software, adding to the overall costs.
Outsourced: Virtual CFO services offer the same level of expertise and industry knowledge, but they work remotely, eliminating the need for full-time employment costs. With a virtual CFO, you only pay for the time and deliverables you require, making it a more cost-effective option.
2. Virtual CFOs have cross-industry experience & perspectives.
In-House: In-house CFOs tend to remain with the same company for most of their careers, limiting their industry exposure. They may lack diverse perspectives crucial for addressing complex financial challenges.
Outsourced: Virtual CFOs bring extensive experience not only in your specific industry but also in related fields. Their broad knowledge base allows them to provide creative solutions to unique problems. With a virtual CFO, you benefit from their wealth of experiences and insights gained from working with various clients.
3. Virtual CFOs Have Access to a CFO team.
In-House: Having only one in-house CFO may result in a knowledge gap if they encounter unfamiliar financial challenges or become unavailable due to illness or other reasons.
Outsourced: Virtual CFO services typically assign a dedicated CFO to your company while also providing access to a team of experts. If additional support is needed, the virtual CFO can collaborate with their colleagues behind the scenes, ensuring a seamless transition if someone is unavailable.
4. Virtual CFOs Provide Surgical-Like Precision to Company Financial Challenges.
In-House: Many in-house CFO may fill various roles in the company which can limit their effectiveness to focusing on crucial financial challenges.
Outsourced: Virtual CFOs focus on the top priorities of the clients and provide attention to those matters without distraction. Having that focused expertise is valuable when a company is faced with time-sensitive issues.
5. Virtual CFOs Provide Trusted Partner Guidance.
In-House: In-house CFOs take on additional responsibilities, such as HR, IT and managing other accounting team members, which may diminish the higher level guidance a business owner may need.
Outsourced: Virtual CFOs offer all the services of an in-house CFO, including executive-level financial planning and reporting. They provide coaching for executive level managers, as well as an internal accounting team. The key advantage is flexibility—you can access these services on-demand, tailoring your financial support to your specific needs.
How Virtual CFO Services Have Saved Companies
Example A:
Sam is the owner of a construction company serving commercial and residential customers. He has never used a virtual CFO and lacked a trusted partner to run business ideas by. Consequently he added sales staff which did not perform well, costing thousands of dollars of lost revenue and wasted opportunites.
Once Sam brought on a virtual CFO, he had a trusted sounding board to filter the pros and cons of his decisions. The virtual CFO provided Sam with an experienced perspective to guide him to a better outcome with a better return on investment for his business.
Example B:
Jenny was contemplating adding an in-house CFO to her growing construction company. The cost of hiring, retaining and providing benefits for this employee was going to be a huge financial burden to the company every month. In addition, she wondered how much of a return on investment this employee would provide.
Jenny decided on a virtual CFO where she could scale up the services when needed, with a much less upfront investment. The monthly rate was about half of what a full-time employee would be. She was able to have a person focused on the important, management-level guidance she desperately needed, from cash flow forecasting to capital purchase decisions. The result is less stress for Jenny and a significant savings in avoiding costly mistakes.
How Barta Business Group Can Help As Your Virtual CFO
At Barta Business Group, we offer a range of financial services tailored to the needs of construction companies:
- Chief Finance Officer: Our virtual CFOs provide executive-level financial leadership for your team.
- Financial Controller: We offer solutions for accounting leadership when you’ve outgrown your bookkeeping services.
- Bookkeeping Services: Our experts handle your books to propel your construction business forward.
- Forensic Accounting: When facing financial disputes or litigation, our forensic accountants specialize in supporting your company.
- Audit Preparation: We prepare your construction company for financial audits to ensure compliance and accuracy.
- Strategy Advisory: Our top-tier C-Level advisory and consulting services complement your financial strategy, helping your construction business achieve its goals.
In conclusion, hiring a virtual CFO for your construction company can offer significant advantages over an in-house CFO. From cost savings to diverse industry experience and on-demand flexibility, virtual CFO services can provide the financial expertise your construction company needs to thrive in a competitive industry. Consider partnering with Barta Business Group to access a team of experienced financial professionals ready to support your construction business’s success.