I met with a friend for coffee the other day. It was the first time I had stepped foot inside a coffee shop since the pandemic began earlier in 2020. Surreal; only way to describe it. I was quickly told by the barista that I needed to put my mask on, but only until I had my coffee. Then I could take off the mask (and apparently not spread the virus.) Weird.

The meeting began with all the regular pleasantries you’d expect in a meet up during a pandemic. “How are the kids?” “What have you guys been doing to pass the time now that basically everything is closed?” “What do you think of e-learning?” etc. 

My friend happens to be a relatively new financial advisor and we often share stories of our financial conversations while ensuring 100% anonymity. I enjoy hearing about the questions he gets from his clients and he shares how he delicately handles the same questions over and over again as many of his clients ask him questions that all the other clients ask; “How’s the market?” “Will I have enough to retire?” “What’s COVID going to do to my portfolio?”

On this particular coffee meet up, he referenced an email newsletter I had sent out a few months back. With his keen eye, he noticed that I had started to put “The Outsourced CFO Team For Your Business” at the top of my newsletters. Of course, he knows what a CFO is / does, but he wanted to know how I came to this title. Before I tell you the story of how the branding came to be, allow me to explain exactly what an outsourced CFO is.

According to a CPAPracticeAdvisor.com article, “The chief financial officer (CFO) is responsible for managing all aspects of an organization’s finance function to ensure that it has the resources necessary to achieve its current year goals and long-term mission.  Successful CFOs generally have significant experience in accounting, finance, economics or business administration and the social intelligence skills that enable them to build relationships and influence others inside and outside of the organization.” Being an outsourced CFO means that the CFO function is done by an “outside firm.” This could be an individual, or a team. Either way, the CFO duties would be done on a fractional basis; a company wouldn’t need a full time person to fulfill these duties, pay their benefits, and pay their salaries.

He asked, “How did you come to brand yourself as the outsourced CFO team for businesses?” I must admit, I wasn’t ready for this question when he asked me and I’m sure my initial response wasn’t as powerful or compelling as it ought to be. Now that I’ve had some time to think about it, I wish I could have that moment back and tell the story as it is:

All companies evolve. They start at one point, change or pivot to get to another, and eventually the business grows to a point where the owner doesn’t have the time or the resources to manage the finances of the business. Not all business owners admit this, of course. But it’s true. So, I’ve assembled a team of extremely smart individuals who love helping business owners with their finances. We get asked to help with all kinds of financial things within a business. And, the best part, is that all of our clients LOVE the support and attention they get in whatever stage of business they are; no matter their size or their need for support. We help clients with payroll needs, sales tax filings, monthly accounting, cash flow forecasting, tax projections, securing additional financing / restructuring their financing, and really any other financial need a business may have. It’s a one-stop-shop for businesses on a fractional basis. Thus, the title being appropriate: the outsourced CFO team for your business.

My friend, remembering Taboo Business Questions has a financing chapter, asked me if the book goes into this at all. I’ll admit, it really only touches on it. I do discuss five situations where it might be time to consider financing. One of those situations is the Cash Flow Fluctuation Protector. This is where a business relies on financing to sustain itself through the ebbs and flows of business. They have this misconception called Fluctuation Financing Paradox; the only way to support a dip in cash flow is through financing.

Being an outsourced CFO is much more than just helping a business obtain financing and navigating cash flow challenges. Having an outsourced CFO does wonders for a company. The ebbs and flows of a business’s need for advice fluctuate with the outlay of cash for the support. The advice is there when you need it, and when you don’t need it, you don’t pay for it. 

In addition to having the “use it when you need it” model of strategic financial support, you also get a tremendous objective advisor. It’s their objectivity that is so appealing. According to this article from Deepsky.co, John D. Rockefeller is credited with saying “I charted my course by figures, nothing but figures.” When you have an outsourced CFO, they are much less likely to be wrapped up in your day to day operations / distractions / emotionality of the business. They make decisions based on facts, figures, and nothing else.

According to this article from Route2Riches.com, the author says, “An outsourced CFO has the advantage of distance from your business. This detachment can be a great asset as they are able to analyze your financial situation with an objective eye.” 

Then, being the good networker and connector that he is, my financial advisor friend asked, “Being an outsourced CFO for businesses must be a MUCH needed service, especially these days. How can I refer you to business owners I meet? Like, how would someone know they need your team’s services?” This question is what prompted me to write this article.

The 7 telltale signs you’re ready for an outsourced CFO

1. You’re ready to level up

Leveling up is something that all businesses do when they’re intentional about their growth. One could say they’re strategic about their voyages. There are 4 simple steps for leveling up your business.

2. You can’t afford a full time CFO.

Let’s face it. Many small businesses can’t afford to pay the $150,000 salary, plus benefits, that good CFO’s can command. They just can’t. So don’t! Get an outsourced CFO and only use it a few hours a month when you need the advice.

3. Your bookkeeper or accountant just aren’t cutting it.

The support you get from a bookkeeper or accountant are NOT exactly the same as an outsourced CFO. While having a great bookkeeper and/or accountant are excellent steps in the right direction, an outsourced CFO is supposed to be much more strategic and proactive while bookkeepers and accountants are usually more reactive.

4. You aren’t getting the data you need to run your business in a timely manner.

Developing a business dashboard is usually high on the priority list when working with clients. He have to make sure that business owners get the data they need when they need it. Sometimes, business owners need a little help thinking about exactly what information they need to be proactive about their business. In these cases we help develop leading indicators.

5. Your technology isn’t streamlining your business processes.

Technology isn’t supposed to be intrusive or cause delays/duplicitous business processes. Oftentimes, technology for a business (which is software and hardware) falls on the CFO to determine what’s best. It’s critical to be very thoughtful about how everything works together to ensure streamlined business processes.

6. You don’t have a budget and you don’t have a month end procedure for checking performance.

Operating your business without a budget is a surefire way to continue fiscal irresponsibility. Part of leveling up and being more fiscally responsible is closing out a month with a structured procedure. How do you know if you had a “good month?” Your outsourced CFO team can work with you to develop these procedures so you can operate your business with confidence.

7. You don’t have a job costing system.

Many business owners I talk to know they need one, but have no desire to actually do it. It isn’t “just the CFO’s job.” It’s a team effort. All employees need to fully understand the job costing system. Then, its management’s responsibility to review it and make adjustments. The outsourced CFO’s role is to develop it and deliver the reports to the executive team.

Many of the business owners our team talks to didn’t go to business school, don’t have a CPA license, and don’t want to be their office manager / bookkeeper. And, that’s the best part! They are super talented and passionate about serving their clientele and have developed a great skill set with which to do so. That’s why they need to hire an outsourced CFO; help them manage the financial aspects of their business so they can stay focused on their high income producing activities. Sometimes this means Leading Your Business Through Stormy Waters and sometimes it means Starting a Successful Home-Based Business.

If you’re not going to get introduced through your financial advisor, then how does one get an outsourced CFO? Easy! You can contact us here. Helping a business with financial concerns, no matter the level, is a sensitive topic. It takes trust, reliability, and a lot of work. We follow The Strategic Approach and make sure we stay Client Focused.

Know someone who you think needs to work with an outsourced CFO? Send us a note about that too. We love introductions!