How do I know if I need a Virtual CFO?
We find two groups of dental, medical or veterinary practices are particularly well-suited to consider Virtual CFO services.
The first are practices with plans for growth—perhaps adding more clinics or merging with another practice—whose accounting systems are cumbersome and time-consuming. Reporting is limited and slow, monthly reports may not be available for weeks after the end of the month. Doctors and practice managers do not feel they have the information or the knowledge to make the best decisions to manage growth profitably.
The second group are those practices that have recently lost their accounting manager/CFO or are looking for more than the accounting firm they work with can provide. These practices need someone who can very quickly take over accounting and financial responsibilities. Long-term financial management and improved processes are important, but the immediate challenge of day-to-day accounting is a top priority.
What does a Virtual CFO do?
A Virtual CFO supports better business management by:
- Analyzing the practices’ requirements and implementing automated accounting processes that improve administrative efficiency
- Providing concise, up-to-date financial reporting plus regular meetings to track goals and provide strategic advice
- Providing comprehensive strategic services including budgeting, forecasting and industry comparisons
- Management of time-consuming financial and regulatory relationships
How is it different from an accountant?
Typically, an accountant provides management of the day-to-day transactional processing and reporting for the practice. A Virtual CFO oversees the day-to-day accounting, plus provides financial expertise to improve the current efficiency of the practice and help you achieve long-term goals. For example, a Virtual CFO should provide:
- Regular review of financial matters to guide the business proactively
- Strategic planning for the practice, including financial analysis and technology evaluation
- Continuity to reduce the impact of key employee turnover
- Insight and perspective to monitor industry-standard financial metrics.
What should I expect my Virtual CFO to give me?
Your Virtual CFO should provide practice and financial information through easy-to-understand dashboards that are updated often. You should have regular virtual meetings to review financial metrics and discuss strategies.
Dashboards and reports should put information in context for you. Key financial metrics should help you improve the practice, providing insight on which services are most profitable, how the practice compares to others, and where improvements are needed. Relevant productivity, costs and other indicators provide information you can act on to improve profitability.
What credentials should they have?
The Virtual CFOs you evaluate should be able to demonstrate a strong track record in helping organizations like yours with accounting and finance management. Generally, Virtual CFOs services will employ a number of CPAs (certified public accountants) and experienced financial professionals.
If the Virtual CFO will be implementing accounting and financial management software, they should be able to provide certifications that validate their knowledge of the software.
What you should ask before you hire a Virtual CFO?
Ask for references: The Virtual CFOs you evaluate should be happy to supply you with names and contact information for previous customers. Call or email those references with your questions and any special concerns you have.
Ask about industry expertise: The Virtual CFOs you consider should have deep knowledge of your industry. They should be familiar with the terminology and primary challenges of the industry.
Ask about certifications: If the Virtual CFO will implement accounting and financial management software, find out what level of certifications they have. Their knowledge of the software they use should be recognized and validated by the vendor.
How will they work with our dental practice manager?
The Virtual CFO will engage with your dental practice manager at whatever level you believe is appropriate. If the practice manager oversees all office and accounting tasks, the Virtual CFO will work with them on accounting and practice management. If they are involved in the strategic decisions for the practice, they can be included in all goal-setting and monitoring reporting and discussions.
Let’s get started with a thorough assessment to build your detailed report on risks, metrics, and how-to guidance.