Business owners need more help than ever to manage cash flow and budget expenses – and 68 percent say they are looking to their accounting and financial partners to provide this help, according to an informal SunTrust survey of business owners.
The broad adoption of online banking and electronic payments brings an increased flow of electronic payment information. Virtual CFO’s (VCFO) can leverage this data to help clients map a cash-flow strategy, assemble detailed budgets and financial statements, and monitor progress on-site or remotely.
Additionally, through deep knowledge of a client’s business and careful research into his or her payments-related practices, a VCFO can provide recommendations to help address priority business issues such as improved cash flow and reduced expenses.
With payment options comes increased customer convenience, which is why more and more business owners have adapted their systems to accept more payment types. Twenty-six percent of business owners added the customer choice of electronic or card payments in the last 12 months, according to an informal SunTrust survey of business owners.
Many small businesses still run a cash-only operation, but consumers and businesses alike continue to move toward electronic payments. Debit and credit card acceptance is becoming a consumer expectation, but card acceptance also is becoming increasingly important in business-to-business commerce. Many companies and government institutions rely on purchasing or corporate cards to reduce the costs of working with vendors. In order to accept their payments, businesses need to be able to accept the cards.
In addition to offering customers convenience, electronic payment capabilities can have an impact on collections by allowing a business to accept a check or card payment over the phone from late-paying customers rather than waiting for a customer to drop a check in the mail.
Active client use of online banking and access to financial information is an important step in a VCFO strategy. This tiered access allows the VCFO to serve clients more efficiently, more often, and from almost anywhere in the world.
Another important cash flow tactic is helping clients set up procedures to analyze and control expenditures. For example, providing designated employees with access to a company credit card can improve expense tracking and limit or restrict spending, in turn giving the business more control over expenditures and cash forecasting.
On the reporting front, a VCFO can use electronic information to create systems that automatically compile a monthly flash financial report from electronic financial data to help evaluate clients’ business performance. This data can be used as part of regular meetings or teleconferences to review performance against targets for budgeting expenses, generating sales, or maximizing cash flow.
As technology advances, better access to better information can help a VCFO increase his or her value to clients. Using electronic financial and payments data can help CPAs automate key reporting functions and spend less time compiling reports and more time working with clients to drive business success, helping elevate the VCFO’s role from bookkeeper or advisor.
