SOP for Appointment & Execution as Virtual CFO (vCFO)

Summary: This Standard Operating Procedure (SOP) outlines the process for a Virtual CFO (vCFO) to engage with and provide financial management services to clients, such as SMEs and startups. The procedure begins with lead generation, an initial discussion to understand the client’s needs, and the submission of a detailed proposal outlining services, deliverables, and fees. This is followed by the formal signing of an engagement letter. The execution plan includes an initial financial review, establishing controls, and a schedule of recurring activities like monthly MIS reporting and cash flow forecasting. The vCFO is also responsible for strategic advisory on topics such as capital planning and cost optimization. The document emphasizes the importance of clear communication protocols, strict confidentiality, secure data handling, and a formal handover process upon the conclusion of the engagement.

 1. Objective

To define the standard process for onboarding, engaging, and executing responsibilities as a Virtual CFO for a client, ensuring transparency, professionalism, and value-added delivery of strategic financial management services.

2. Scope

Applies to:

• Small & Medium Enterprises (SMEs
• Startups & funded ventures
• Family businesses
• Clients without a full-time CFO

Covers the process from client identification to service delivery and performance review.

3. Pre-Requisite

• Business profile and financials from the client
• NDA & proposal documents ready
• Service capability in:
  • Financial planning
  • MIS reporting
  • Fundraising & banking
  • Compliance overview
  • Strategic advisory

4. Appointment & Onboarding Process

Step 1: Client Lead Generation

• Referral / inquiry via website, network, or pitch
• Capture client’s business details
• Schedule discovery call

Step 2: Initial Discussion

• Understand business model, financial pain points, growth plans
• Assess areas needing CFO-level support
• Define potential engagement models (monthly retainer, project-based)

Step 3: Proposal & Scope Finalization

• • Submit proposal with:
  • Services offered (core vs. optional)
  • Fees (monthly/hourly/project)
  • Deliverables
  • Timelines
• • Align on KPIs, confidentiality, and reporting frequency

Step 4: Engagement Letter Signing

• Draft & execute Engagement Letter / Contract:
  • Scope of Work (SOW)
  • Tenure & Exit Terms
  • Fee Structure & Payment Terms
  •  NDA/Confidentiality Clauses
• Get signed by authorized signatory

Step 5: Kick-off Meeting

• Introduce vCFO to internal stakeholders
• Collect access to systems (accounting software, payroll, bank data, etc.)
• Setup reporting format and meeting calendar

5. vCFO Execution Plan

A. Initial Financial Review

• Review:
  • Trial balance & ledger structure
  • Cash flow
  • Budget vs. actuals
  • Compliance calendar
• Identify red flags and process gaps

B. Establish Financial Controls

• • Recommend or set up:
  • o Monthly MIS formats
  • o Approval matrix for expenses
  • o Payment authorization flow
  • o Budgeting tools

C. Monthly/Weekly Activities

Activity Frequency

Monthly MIS Monthly

Cash flow forecasting Weekly/Bi-weekly

Review of receivables/payables Monthly

Board-level financial briefing Monthly/Quarterly

Tax/Compliance updates Monthly

D. Strategic Advisory

• Capital planning & fundraising
• Pricing, margin analysis
• Cost optimization
• Investor pitch support (if needed)

 6. Documentation & Reporting

Document Format/Tool Responsibility

Monthly MIS Report Excel / Google Sheets vCFO Team

Cash Flow Statement Google Sheets / ERP vCFO

Budget vs Actuals Excel vCFO

SOPs or Policy Notes Word / PDF vCFO

Board Presentation PowerPoint vCFO

7. Communication Protocol

• Weekly review calls with promoter/CE
• Monthly finance review with stakeholders
• Quarterly update to board/investors (if applicable)
• Use collaborative tools (Zoom, Google Drive, Slack, etc.)

8. Confidentiality & Data Securit

• NDA signed by both parties
• Use secure shared drives (e.g., Google Workspace, Dropbox Business)
• Avoid sharing sensitive info on WhatsApp/email without encryption

9. Performance Review & Renewal

• Quarterly review of deliverables and client satisfaction
• Adjust scope/fees if client scales or needs evolv
• Option to convert to full-time CFO or expand services

10. Exit & Handover Procedure

• 30-60 days notice as per engagement letter
• Handover documentation:
  • Working files
  • Access credentials
  • Handover note with pending actions
• Conduct exit interview to collect feedback