Virtual CFO Services: Engagement Letter Sample

This is a sample engagement letter for Virtual CFO (vCFO) services, outlining the terms between a service provider and a client. The letter details the scope of work, which includes financial reporting, strategic planning, cash flow management, compliance oversight, and process improvements. The engagement is set for a specific term and is renewable, with fees structured as a monthly retainer. The document also specifies confidentiality clauses, a limitation of responsibility (stating the vCFO is not a statutory auditor or tax advisor), and a termination clause requiring 30 days’ notice. Article provides a detailed list of deliverables and timelines, covering the preparation of monthly financial statements, budget forecasting and support for audits, establishing a clear framework for the professional relationship.

Sample Engagement Letter – Virtual CFO Services

[On the Letterhead of the CA Firm / CFO Services Company]
Date: [DD/MM/YYYY

To,
[Client Name]
[Client Address]

Subject: Engagement of Virtual CFO (vCFO) Services

Dear [Client Name],

We are pleased to confirm our appointment as your Virtual Chief Financial Officer (vCFO) for your organization, [Company Name], to assist you in managing your finance function in a structured, timely, and strategic manner.

This engagement letter outlines the scope of work, responsibilities, deliverables, fees, and terms of service.

1.Scope of Services

We shall provide Virtual CFO services covering the following functions:

a) Financial Reporting & MIS

• Preparation of monthly MIS including P&L, Balance Sheet, Cash Flow
• Variance analysis vs budget and prior period
• KPI dashboard and performance ratios

b) Strategic Financial Planning

• Annual budget and forecasting
• Financial modeling and projections
• Business performance review and board reporting

c) Cash Flow & Working Capital Management

• 13-week rolling cash flow forecast
• Receivables and payables review
• Inventory movement and working capital optimization

d) Compliance Monitoring (Oversight)

• Tracking statutory and regulatory due dates
• Coordination with tax and legal advisors for compliance
• Preparation for internal/external audit support

e) Process Improvements

• Review and improvement of finance processes and controls
• ERP/accounting software implementation assistance (if needed)

(Detailed annexure of deliverables and timelines can be attached as “Annexure A”)

2. Term of Engagement

• The engagement shall be valid for a period of [6 / 12 months]commencing from [Start Date] and shall be renewable upon mutual consent.
• Services will be provided remotelywith periodic on-site visits as required.

3. Fees & Payment Terms

• Monthly Retainer: INR [Amount] + Applicable Taxes
• Payment Due: Within 7 days of receipt of monthly invoice
• Out-of-pocket expenses (e.g., travel, lodging) will be billed separately, if applicable.

4. Confidentiality

We shall maintain complete confidentiality of all data and documents received or generated during this engagement. A separate Non-Disclosure Agreement (NDA) may be signed if required.

5. Limitation of Responsibility

Our role will be advisory and executional in nature with a focus on strategic financial management. However, we will not be acting as a statutory auditor, tax advisor, or legal representative unless specifically engaged for such purposes.

6. Termination Clause

This engagement may be terminated by either party by giving 30 days’ prior written notice without assigning any reason. All dues shall be settled prior to termination.

7. Acceptance

If the above terms are acceptable to you, kindly sign and return a copy of this letter in confirmation.

We look forward to supporting your business growth with strategic and reliable CFO insights.

Warm regards,
For [Your Firm Name]
[Authorized Signatory Name]
[Designation]
[Email] | [Phone]
[Website URL]

Acknowledgment and Acceptance

I, [Client Name], on behalf of [Company Name], accept the above terms and appoint [Your Firm Name] as our Virtual CFO for the agreed duration and scope.

Signature: _______________________
Name: __________________________
Designation: ____________________
Date: ___________________________

Annexure A – Detailed Deliverables & Timelines for Virtual CFO Services

Notes:

• Timelines can be adjusted based on client needs and business cycles.
• Deliverables may be customized per engagement and industry.
• Additional ad-hoc support such as fundraising, valuations, or special projects to be scoped separately.