Virtual CFO vs finance outsourcing: What’s the difference?

Virtual CFO vs finance outsourcing: What’s the difference?

The term ‘virtual CFO’ (vCFO) is often used interchangeably with ‘finance outsourcing,’ however, they can mean different things. Understanding the difference is important for businesses considering external financial support, as the level of service and impact on your organisation can vary depending on which option you choose.

Think about your business;

• Is your team buried in day-to-day operations, with no time to focus on the bigger picture or plan ahead?
• Have you lost a key finance person and are struggling to fill the gap in a tight labour market?
• Do you ever find yourself needing financial expertise for a specific project, confidential analysis, or just a second set of eyes, but don’t have the capability in-house?
• Maybe your business isn’t growing, or is growing too fast, and you need some financial insight.

These are just some of the reasons considering using external finance support could be the smart, flexible solution to support your business without the cost of a full-time hire. The key is ensuring that you get the right level of cover for your business.

Generally, the services can include:

• Financial strategy & leadership
• Budgeting, forecasting & performance (FP&A)
• Cashflow management
• Financial operations & compliance
• Systems, controls & process improvement
• Commercial insights (pricing, projects & business cases)

vCFO

A vCFO is often focused on the bigger picture. They set the financial strategy, lead major strategic projects such as capital raising, mergers, or bank negotiations. They provide insight and direction to business owners and boards, turning financial data into clear guidance for decision-making. It is a leadership role within the finance function, mentoring and developing the internal team, strengthening governance, and ensuring the business has the right structures in place to support growth.

While a traditional CFO attracts a high fixed salary, a vCFO arrangement can be more cost-effective as you just pay for the services you need. This means you get the benefit of CFO-level strategy input, insights and leadership when you need it, but at a lower cost and risk.

Finance outsourcing

Finance outsourcing on the other hand is generally focussed on hands on, practical day-to-day finance operations. Tasks can range from month end reporting, compliance work, running forecasts and budgets, processing payroll and helping with projects. The emphasis is on execution and accuracy, keeping the finance operations running smoothly and freeing up management time.

Blended model

There is also a blended option, where you can access both functions in one solution scaling from strategic thinking, board reporting, and team oversight through to hands on monthly reporting and day-to-day support. The scope depends on the individual you engage and whether they are backed by additional resources, such as a wider firm.

Partnering with an accounting and advisory firm such as Nexia New Zealand can provide more flexibility, as the role can be split across people with different skill sets. This allows the service to be tailored to your needs, balancing cost with value to ensure the best solution for your business.

vCFO and outsourced finance services can be performed entirely virtually, or partially onsite, with either ad hoc or fixed hours over a set period of time.

Value of outsourcing

Outsourcing is not about replacing internal knowledge, but about balancing cost with value.

A vCFO or finance outsourcing partner can provide the expertise and structure of a senior finance role without expense and time of recruitment, and full-time cost.

• Fast mobilisation – once the engagement is agreed, support can start quickly.
• Freeing up time – lets you and your team focus on sales, operations, and growth instead of finance admin.
• Bridging operations and finance – turning complex data into easily understandable insights so day-to-day decisions align with financial goals.

Some business owners worry about losing in-house knowledge, but strong outsourcing partners address this risk. If your business grows and you later decide to hire internally, the vCFO or outsourced team can provide a detailed handover and remain available for advice. This gives continuity, extra capacity when needed, and protection against sudden staff loss.

Practical steps to take when outsourcing

Here are four practical steps to make outsourcing work for your business:

1. Define what you need
   Be clear on whether you need day-to-day finance support, high-level strategic guidance or both.
2. Look for proven experience in your industry
   A good finance partner should bring more than just technical skills. Look for practical, relevant and demonstrated experience that align with your business needs.
3. Assess communication and cultural fit
   Outsourced finance providers and vCFOs effectively become part of your team. Choose for a partner who can explain financial information clearly, communicates proactively, and fits well with your company’s values.
4. Establish structure and accountability from day one
   Set clear expectations. Agree on reporting timelines, meeting frequency, and what success looks like. Regular reviews will ensure the arrangement continues to support your goals as your business evolves.

Talk to our experts

To learn more about how a Virtual CFO or our outsourced finance solutions could help your business, please reach out to your local Nexia Advisor. We can tailor the right solution to suit your business needs and budget.

About Nexia New Zealand

Nexia New Zealand is one of New Zealand’s leading full-service chartered accounting and business advisory consultancy firms, offering the full range of chartered accounting, business advisory, corporate advisory, tax, audit, insolvency, liquidation and receivership services.

Nexia New Zealand has four offices throughout New Zealand: Victoria Street in Christchurch, Albany on Auckland’s North Shore, Newmarket in the Auckland CBD and Hastings in Hawke’s Bay.