The CFO: The Missing Piece for Small Business Growth and Success

The rise of fractional CFOs has revolutionized the way small businesses approach their finances. While most businesses already have a tax CPA to assist with tax filings, and as companies grow, they often turn to bookkeeping firms or hire entry-level accountants to manage their finances, there comes a point where these solutions are no longer enough. That's where fractional CFOs come in.

If your business is generating over $1-2 million in revenue, and you find yourself grappling with questions such as "How can I optimize my company's financial position for a sale?" or "What can I do to improve operational inefficiencies and maximize my resources?" then a fractional CFO could be just what you need.

In this article, we'll delve into the differences between tax CPAs, bookkeepers, and fractional CFOs, and explore how the latter can help you gain financial clarity, boost your cash flow, and make informed decisions for the growth and success of your business.

The CPA

A Certified Public Accountant (CPA) is a valuable asset for any business, especially when it comes to tax planning and preparation. While a CPA can serve as a CFO, not all CFOs are CPAs.

Many CPA firms offer bookkeeping services to support tax returns, however, the focus is often on taxes and may not take into account the operational needs of your business. To ensure you receive the best results, it may be more cost-effective and efficient to work with separate bookkeeping and CPA firms.

For small business owners, hiring a CPA can provide the following benefits:

• Tax Planning and Preparation — Ensure your CPA is conducting tax planning for your business.

• External Compilation, Review, or Audit — Required for investors or financing, this service provides an independent review of your financial statements.

• Project-oriented Consulting — Services such as mergers & acquisitions, due diligence, and valuations can be critical in helping you grow your business.

The Bookkeeper

A bookkeeper or entry-level accountant is responsible for the day-to-day transactions and operations of your business. They handle tasks such as monthly bank and credit card reconciliations, accounts payable, payroll processing, invoicing, collections, and journal entries. Bookkeepers are essential in keeping your business's financial records up-to-date and accurate.

There are various levels of bookkeepers available, and it is important to find one that is reliable and consistent. Consider working with a bookkeeping firm that has been in the industry for several years and has a track record of delivering high-quality work.

If you need help finding a bookkeeper, feel free to reach out to us at team@bendercfoservices.com and we can introduce you to some trusted providers.

The Fractional CFO

The CFO is much more operationally minded and has a goal to help the organization in the following ways:

• Financial Forecasting and Modeling – With their deep expertise in financial analysis and modeling, a fractional CFO provides small businesses with a powerful tool for understanding their current and projected financials. This enables small business owners to make informed decisions that can help them grow and succeed.

• Financial Reporting and Analysis – A fractional CFO takes the information generated by bookkeepers and accountants and provides insightful commentary and context. This helps small business owners understand the story behind the numbers and make data-driven decisions that can lead to improved performance and profitability.

• Internal Controls Review – To minimize the risk of fraud, it's essential to have someone reviewing the accounting. A fractional CFO provides small businesses with the assurance of having a seasoned professional who can review accounting processes and ensure that internal controls are in place.

• Cash Forecasting and Management – Effective cash management is critical for small businesses. A fractional CFO can help small businesses create a comprehensive cash management plan and provide them with a clear understanding of their future cash needs. In the event of cash challenges, a fractional CFO will look for financial opportunities with a bank or even investors if applicable.

• Process Improvement – As small businesses grow, it's essential to regularly review and improve their financial processes. A fractional CFO has the expertise and experience to identify areas for improvement, streamline processes, and help small businesses achieve maximum efficiency.

• Coordination – A fractional CFO helps coordinate with other professionals in areas such as taxes, insurance, audits, and banking. They provide small businesses with a single point of contact who can help them navigate the complex world of financial management.

• Connections – Relationships are key in today's business world. A fractional CFO can help small businesses make valuable connections with other professionals, including those in marketing, human resources, training, coaching, staff development, and business consulting.

• Training – A well-trained team is essential for the success of any small business. A fractional CFO can provide training and development opportunities for accounting personnel to help them grow and succeed as the business grows.

The CFO as the Financial Glue

The roles of bookkeepers, CPAs, and CFOs each play a crucial role in a small business's financial health. A bookkeeper ensures accurate and up-to-date transactional accounting, while a CPA provides valuable services such as tax planning, audits, compilations, reviews, and valuations. However, it's the CFO who brings all the pieces together and provides the financial insights that are essential for informed decision-making and growth.

The good news for small businesses is that fractional CFOs are now readily available and can offer all the benefits of a full-time CFO at an affordable price. With the help of a fractional CFO, you can get connected with a top-notch tax CPA and bookkeeper, saving you both time and money.

At Bender CFO Services, we understand the importance of financial management for small businesses. That's why we offer affordable and flexible fractional CFO services that can help you achieve your financial goals. Our team of experts has years of experience and expertise, and we're dedicated to helping you succeed.

If you're ready to take your financial management to the next level, contact us today to learn more about our services. Don't wait, start making informed financial decisions for your business now!