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Virtual CFO Service -A Smart Choice for the MSMEs

MSMEs a.k.a. Micro, Small and Medium Enterprises are considered to be the backbone of the Indian economy considering their valuable contribution to the country’s socio-economic development. An MSME is relatively a small scale organization where timely availability of funds and its proper management are extremely important for its long run sustainability and success.

With the theme of the ‘Atmanirbhar Bharat’ in the year 2020, MSMEs have gained even more recognition and consequently, a number of economic and financial reforms has been made by central government to provide easy and affordable debt options to this sector. With the funds availability been made easier by the government, the importance of managing them has increased umpteen.

Proper management and utilization of funds requires expert’s skills and that is where the CFO or the Chief Financial Officer comes into picture. A CFO is a part of the organization’s top management whose primary responsibility includes providing professional advice, managing the financial risks, financial reporting, taxation, compliances and record-keeping etc.

An in-house CFO can help the companies to navigate and become financially strong but most MSMEs cannot afford to appoint one. Therefore, virtual CFO with his/her knowledge and team can provide expert services. Virtual CFO always be there when you need him/her whether he/she is present all the time on site or not. In present pandemic situation a Virtual CFO is partner to save you from financial crises.

Virtual CFO takes care of MSME’s financial health and make them to concentrate on their core businesses.

A good virtual CFO Service will take care of these services to a business:

  • Accounting And Book-Keeping
  • Taxation Services Such As Income Tax, GST, Profession Tax
  • Company Law And Compliance
  • Financial Statement Preparation & Records Management
  • Cash Flow Forecasting & Budgeting
  • Banking Services
  • Miscellaneous Services

Here we will elaborate on the above services for a better understanding.

Accounting and Book-keeping

With complex and timely legal compliance requirement it is compulsory to do accurate accounting in timely manner in line with all the tax laws. You will have two option one is to have an in-house expertise to handle them the other option is to have a Virtual CFO which allows you to take the guidance of a CFO Service to choose and conform to the appropriateness of data entered, set up systems, regular monitoring and reporting.

Tax services

Profession tax, Income Tax, GST and man more Small business owners are generally not aware that many of their daily decisions have direct or indirect impact on their taxes. They often make mistakes and end up paying high amount of axes, interests and penalties. You can take support from your virtual CFO which help you to grow your awareness in the matters relating to your current tax status and tax implications of your decisions. It is good to be aware in time rather than getting hit by the unexpected tax at the year end. They can also help you with tax planning & savings in turn, help in timely and appropriate reply to various notices received from the tax departments.  

Company Law and Compliance

Your virtual CFO can be provided all the compliances & advisory related with company law matters. Nowadays there are heavy penal consequences for filing incorrect returns/forms or for not complying with legal issues in a timely manner. Compliance is counted as one of the basic services provided by your virtual CFO, which enables your business to adhere to the essential legal requirements in a timely manner according to the all the latest provisions under the Profession Tax Act , Income Tax Act, Companies Act, GST etc.

Financial Statement Preparation and Records Management

Virtual CFO can help you prepare financial statements like Balance Sheet, Profit and loss statement and Cash Flow Statements. These reports are like health reports of various aspects of a business, which are referenced to make quick decisions by the management. The statement’s evaluation and preparation are conducted on a monthly or weekly basis as per requirements of management.

Cash Flow Forecasting and Budgeting

A good understanding of the cash position at a target period is key to take the right business decision. The cash flow forecasting by the virtual CFO informs you about how much extra fund will be needed for a certain project and to make proper cash arrangements for timely execution.

Banking Services

Any business has the ups and downs in terms of sales and cash flow. But convincing statements help the businesses to get loan from a bank even when there is a downturn.

Miscellaneous Services

Your virtual CFO also provide miscellaneous financial services such as debt planning, audit support, cost management, MIS reporting, , break-even analysis, Internal controls etc.