Virtual CFOs (Part 3): Disrupting a conservative market

Virtual or remote CFOs are using specialist software and cloud solutions to deliver services to small businesses and entrepreneurs. But as their automated solutions free up the business to focus on strategy and growth, could they be creating a model for the CFO of the future - regardless of organisational size? Beth Amato spoke to three virtual CFOs to learn how they are shaping the future of finance.

Louw Barnardt, founder of Outsourced CFO, and his other co-founders spotted a gap in the market a few years ago – providing book-keeping services and financial management to startups and disrupters. After a few mishaps, Outsourced CFO is now “cooking”. The company’s 26 “world-class” finance professionals are the virtual CFOs for 80 local and international companies (many of then technology and innovation firms). 

The 31-year old Louw won the 2018 Sanlam/Business Partners Emerging Entrepreneur of the Year, and a Top 35 Under-35 Chartered Accountant. The judges, he believes, were impressed with how Outsourced CFO reinvented accounting, and that the company is focused on facilitating entrepreneurs and scaling start-ups. Louw and his team have helped clients tap about R500 million in seed and growth funding.

A report by PwC: Financial Services Technology 2020 and Beyond – Embracing Disruption[ital] notes that FinTech start-ups are encroaching on established markets, “leading with customer-friendly solutions…unencumbered by legacy systems. Customers have had their experiences set by other industries; they are now demanding better services, seamless experiences regardless of channel, and more value for money… And the pace of change shows no signs of slowing. It is clear that technology is affecting finance in a multitude of ways.”

Marnus Broodryk, owner of the Beancounter (pictured) says the cloud isn’t going anywhere. This is confirmed by the PwC report, which states that in 2020 hardware, software and data could reside anywhere. The advice is: “Prepare your architecture to connect to anything, anywhere.” Unfortunately, companies have systems that are far from future-proof. A virtual CFO already works with the cloud, managing a lot of different types of data. Furthermore, their approach significantly reduces capital and operating expenditures.

Of course, virtual CFOs can’t rest on their laurels. The PwC report notes that many aspects of digitisation are currently “beyond our control, in forms and locations that “haven’t been anticipated.”
 
AI and the big-company CFO
While the virtual CFO is currently an asset in small and medium-sized businesses, there’s no reason why CFOs in larger organisations can’t push for significant digitisation in a disruptive spirit. CFOs in big companies have this power.  But the concern is the exact return on investment and the time frame for this. Marnus notes however that automation is assisting chief financial officers reduce and even prevent error because they have broken free of manual processes. “Technology improves forecast accuracy and reduces compliance and auditing costs,” he says.

Perhaps in the near future, organisations will have most, if not all of their employees working remotely. Graham Shapiro, owner of Myccountant, says that “the larger trend is moving towards remote working with clients scattered all over the world.” He doesn’t have an office, doesn’t really use any paper and has clients all over South Africa and the world. Face-to-face meetings are a rarity. As soon as 2030, a CFO in a large organisation may not be distinguishable from the role a virtual CFO currently plays.