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What is Cash Flow and How Can a Virtual Chief Financial Officer Help Improve it?

What is Cash Flow and How Can a Virtual Chief Financial Officer Help Improve it?

To run a successful business, you must have a solid cash flow. 

Understanding cash flow is key to prospering as a business owner. A virtual Chief Financial Officer (vCFO) can help you develop your business and triumph. Your vCFO will use several tools and strategies at their disposal, including cash flow reports, amongst other data sources, to create a strategic plan that helps grow your business.

The vCFOs at Gonzalez and Arrambide, Inc., can inform you about the financial information you need to make critical business decisions.

What Is a Cash Flow Report?

In short, cash flow is how much money is coming into your business and how much is going out. A cash flow report will summarize how your business is doing in this regard.

For example, more money coming in than going out will give a positive monthly cash flow result. If this monthly trend continues, you can expect to profit. It is possible to have a good cash flow result at the end of the year even if you were negative some months. 

It’s worth noting, however, that a cash flow report isn’t the same as an income report.

Who Creates a Cash Flow Report?

This report falls under the responsibility of a vCFO since it is per finances. While your accountant creates the income report to help you determine how much tax to pay, your vCFO will create a cash flow report to assist in determining when you are ready to grow your business and increase your future profits.

How Is a Cash Flow Report Used?

A cash flow report is useful for predicting future account balances. These forecasts are what allow strategic plans to be made. Your cash flow report will tell you when your business can operate with the extra costs that come with expanding without breaking the bank. 

By timing your growth correctly, your business will experience increased revenue with minimal risk.

Outsourcing to a Virtual CFO Can Improve Your Business’ Cash Flow

Owning a business can be extremely overwhelming and stressful, but by hiring a virtual Chief Financial Officer in Weslaco, you will be assisted with the financial services your business may need. By reaching out to Gonzalez and Arrambide, Inc., you’ll get the guidance you need to start or grow your business.

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5 Reasons Why Your Business Needs a Virtual CFO

5 Reasons Why Your Business Needs a Virtual CFO

No matter if you run a startup company or are a veteran to running a business, making sure your cash flow is distributed efficiently is key to your business operations. Let’s face it, business owners have a lot to manage on the daily, and drafting financial strategies and conducting standard bookkeeping can take a lot out of your day.

If that alone wasn’t enough to consider hiring a virtual chief financial officer (vCFO), the experienced vCFOs of Gonzalez & Arrambide can also help your business in the following ways.

1. Customized Goal Setting

The first thing a quality vCFO will do for your business is to fully understand and layout your business’ short and long-term goals. These goals will become the blueprint from which to build your custom strategy.

You get customized experience to your needs and goals. This cuts any expenses on services you don’t require, saving you more on overhead costs.

2. Report Design and Problem Solving

Our vCFO will design and set a standard report to help organize your finances. Because we have corrected many issues and guided financial situations in different companies, we can tailor your financial strategies to achieve your goals in the most cost-effective way for you.

Their experience will help you overcome your financial woes even before they happen.

3. Technology Efficient

Our vCFO can optimize any of your financial technology. This way we will maintain the financial organization within your business and cut expenses on the software you don’t really need.

Virtual CFOs have experience with a wide range of different systems and products since they work remotely, and our vCFOs will be able to provide first-hand advice on different systems and find one suitable for your needs.

4. Experience and Custom Balance Sheet Builds

Hiring a vCFO gives you a fresh pair of eyes that have seen plenty of balance sheets before. A quality vCFO will analyze your balance sheet when we come on board, and if needed, we will rework it.

By outsourcing your CFO services with us, you’re bringing instant experience to your business. That experience could be vital, especially when it comes to a startup business.

5. Streamline Financial Processes

When you partner together with our vCFOs, you’ll only gain from their financial expertise while obtaining help with developing and streamlining your financial operations. Because our vCFO has worked with various clients, we have a broad range of insights into operational improvements across many different industries.

As your business grows, our vCFO can grow along with you. Whether you only need the Gonzalez & Arrambide vCFO services for one day a week or part-time, we are here to support you and your business at every business milestone.

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What Does a Virtual Chief Financial Officer Do?

What Does a Virtual Chief Financial Officer Do?

Now that you’ve started down the path of entrepreneurship, there are a series of essential roles to fill, like CEO and marketing team positions. However, many people make the mistake of leaving the financial department last in the staffing queue.

Within the financial department, the most ignored position is that of Chief Financial Officer, also known as the CFO. The lack of a CFO is the reason many enterprises don’t make it.

At Gonzalez & Arrambide, we want to showcase the importance of hiring one of our vCFOs to help your business boom.

What are the Duties of a vCFO?

The CFO is responsible for managing the financial aspects of your business. Yet, a full-time, in-person CFO can be costly. This is where hiring a virtual CFO (vCFO) could make a lot of sense for small businesses and startups.

A vCFO is a consultant or business that offers the services of a CFO but does their job remotely and usually on a part-time basis. The vCFO will focus on creating high-level financial strategies and putting them into action, such as:

  • Managing and monitoring the bookkeeping
  • Creating short and long-term financial goals and providing valuable feedback
  • Providing competitor analysis
  • Cutting out any financial waste, with growing your business efficiently in mind
  • Managing your business spending
  • Generating key financial metric reports

Our vCFOs at Gonzalez & Arrambide can provide financial services on a weekly, monthly, or quarterly basis. Our vCFOs are also ready to provide advice for any specific project you have in mind. However, if you already retain the services of a full-time CFO, investing in a vCFO may not be an optimal decision for your business. Keep in mind, however, that it is more fiscally advantageous to hire a vCFO over a CFO.

At the same time, if you have a new startup, hiring a vCFO is always the better decision to save on overhead costs.

Find the Weslaco Financial Services You Need at Gonzalez & Arrambide

As your business grows, a vCFO can grow with you. Get all of the skill set you need with a traditional CFO working with you at a more affordable rate. Whether you only need the Gonzalez & Arrambide vCFO services one day a week, or part-time as you become more successful, we are here to support your business at every step.

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Do You Need a CPA or VCFO for Your Business?

Do You Need a CPA or VCFO for Your Business?

Making sound financial decisions are crucial to the success of any size company. A financial professional will help you understand and chart strategies to help you manage a profitable company, but for many, there may be confusion regarding the respective services of a Certified Public Accountant (CPA) or a virtual Chief Financial Officer (VCFO). 

What your business needs will determine what level of financial professional you need. To clear the air, the virtual CFOs at Gonzalez & Arrambide want to discuss the differences between all of these roles so that you can get the most benefit for your business.

The Differences Between a CPA and a VCFO

A moderate sized company with revenue ranging from $2 million to $20 million may have senior executives rely on the advice of their CPA for matters involving certain business finances. In these instances, the CPA will offer a financial opinion based on experience with taxes and tax law, rather than offering insight related to long-term financial advice for the business.

The responsibilities of a VCFO go beyond tax advice and basic accounting. In a nutshell, a VCFO helps with business planning, forecasting, negotiating, and business budgeting, all of the same kind of responsibilities a company Chief Financial Officer (CFO) would do. A VCFO, on the other hand, saves a company money because they aren’t paying for a full-time employee with benefits.

It’s important to note that you don’t need to be a CPA to be a VCFO, and CPA’s aren’t always well-versed on managing complex corporate finances that a VCFO can.

Let’s elaborate a little bit on these roles now.

More Into the Role of the CPA

In the simplest of terms, the CPA is in the business of tax return preparation; that is their primary responsibility. A CPA may collaborate with a VCFO to provide tax advice that will ultimately help guide the company’s financial decisions based on short term and long-term objectives. 

The CPA’s knowledge revolves around taxes and tax laws that lend to the strategies that may be developed by an outsourced CFO. Often, a company may mistakenly look to a CPA for business advice that may be best handled by an individual with a background as a VCFO. A CPA will help a company thrive by performing a range of duties including: 

  • Organizing and updating accounting records
  • Staying abreast of tax laws 
  • Tax preparation and analyzing reports on transactions
  • Conducting regular, detailed audits 
  • Manage financial documents, expenditures, and investments

Consider a VCFO to Help You Strategize While Saving Money

When evaluating the financial goals and objectives of a company, an outsourced CFO will bring strategies and insight that a CPA may not be equipped to handle. A qualified and experienced VCFO will focus on future cash flow and offer expert advice on operational planning to ensure a company is sustainable. In addition, a company may choose to hire a VCFO in order to:

  • Chart a financial strategy
  • Forecast growth
  • Outline sustainability by addressing expenses and highlighting assets
  • Improve profitability 
  • Control expenses and cash flow
  • Establish strong financial relationships
  • Assess financial risk
  • Finance project management 
  • Liaison shareholder relationships

Ultimately, a business may decide to hire a CPA, a VCFO, or both based on a range of factors exclusive to your company’s needs. Whether you’re a growing business or an established company, hiring the right team can make all the difference in your financial outlook.

The Virtual CFOs at Gonzalez & Arrambide Offer Trusted and Sound Service

Founded in 1996, Gonzalez & Arrambide, Inc. has become a respected and recognized accounting firm dedicated to helping individuals and businesses of all sizes with their business needs and strategy. Our commitment to services ensures we give you what you need to succeed and grow your revenue streams. 

At Gonzalez & Arrambide, we offer our clients Virtual Chief Financial Officer (VCFO) services and have helped them improve financial management without spending the substantial resources needed to hire someone in a full-time role. 

Serving the entire Rio Grande Valley Greater Metro and located in Weslaco, our VCFOs are more than qualified to meet your business needs.

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