5 Common Business Problems Part Time CFOs Solve

A small business owner solving problems with the help of a part time CFO

We know that running a business comes with a variety of challenges and obstacles such as managing workflows and daily operations while also turning a profit. While business owners may be perfectly capable of handling most if not all of these hurdles, as their organization continues to grow and scale, they could find themselves requiring outside assistance to get it all done.

If you’re currently grappling with any of these problems, we’re here to help.

1. Lack of Clean, Current, and Helpful Financials

A part time CFO’s first step is always to make sure that you have financials and that they are organized in a way that is useful to your business. If you’ve been keeping track of all your transactions in a single Excel spreadsheet, or even if you haven’t been keeping track of them at all, we’ll get your financials in order and ensure that everything is correct. Once we know that your accounting is accurate, we’ll pull key insights and date so that your financials are actually providing value and insights for you. We do this in a variety of ways.

Connecting Balance Sheet Items to Sources

One of the first things we need to do is ensure that every item on your balance sheet ties out to a source document. For example, asset purchases would connect to the appropriate purchase documents, loans would connect to loan agreements, and bank statements would tie out to the correct bank accounts.

Providing a Clear Picture of Your Business

You want to be able to look at your financials and clearly understand what they mean and how you can leverage that data. At a glance, you should be able to see how your business is performing and where there may be room for improvement. We’ll not only create reports that do just that, but we’ll also teach you how to read them and put them to work for you.

Creating a Dashboard

Similarly, we’ve found it very useful to provide an online dashboard with financial metrics that are easy to view and understand. This gives you direct access to all of this data and helps you to adjust your strategies and processes in real-time if need be. Creating the right dashboard with the functionality you need will help you to see just how useful clean financial reports can be.

2. Poor Cash Flow

Every day, we meet with business owners who are bringing cash into their organizations but have no idea where it all goes. They’re successful and are doing good business, but their bank account does not seem to reflect that.

It is absolutely key for business owners to understand and have a handle on their cash flow – the movement of money in and out of their organization. Keeping that inbound money in the door is like an infusion of cash into your business, and leveraging it as you would an investment can be extremely impactful. That’s why we say cash flow is oxygen for your company, and that if accounting is just a means to an end, that ideal “end” is having positive cash flow, which leads to financial independence and freedom for the business owner. 

We’ll take a look at your updated financial reports and business strategy to find ways to improve your cash flow and prevent all of your profits from going right back out the door.

Understanding Your Monthly Cash Flow

We’ll start by looking at the financials and dashboard we’ve created to see what your cash flow currently looks like. We’ll analyze all of the ways that money is coming in and going out of your business so that we get a full understanding of income and expenses. This can uncover a lot of underlying problems that may seem small individually, but add up to big expenditures over time.

Develop a Strategy to Improve It

Once we can see the flow of cash in and out of your business, we can identify areas to improve. Maybe your accounts receivable processes need some work, or you can eliminate some expenditures over time. Paying off debt is another great solution to increase your cash flow. Without that regular payment, more funds are freed up each month. Every situation is unique, so we’ll create an action plan specific to your business and its needs.

Putting That Cash to Good Use

Positive cash flow can act as an investment into your business. Once you have those excess funds to work with, what are you going to do with it? A part time CFO will help you to find optimal ways to utilize that cash, leveraging it to grow and expand your business and therefore your success.

For example, if you have an excess of $50,000 in cash, you have to make a strategic decision. Can you invest it into your business? Will that be a one-time expense, and if not, how long will that $50,000 last? What will that return on investment look like? If you can’t find a sustainable, lucrative investment for these extra funds, it may be best to cut a dividend to ownership.

3. Inefficient Accounting Processes

Perhaps your accounting practices are the reason that you haven’t had consistent, reliable financials in the past. If your numbers aren’t organized, or even correct, that can really start you off on the wrong foot. So, we’ll make sure that you’re setting the right foundation for your accounting. This leads to stronger financials, which leads to better insights and a more reliable strategy.

Our part time CFO services ensure your business is set up to:

Leverage the Latest Accounting Technology

If you’re entering financial data manually or doing it on paper, there’s room for improvement. There are many pieces of accounting software and helpful tools such as:

  • Quickbooks Online, which tracks expenses, income, and more. It can even generate invoices and tax forms.  
  • Jirav, which provides financial reporting, forecasting, and budgeting dashboards.
  • Bill.com for automating accounts receivable and accounts payable (AR/AP) processes
  • Bill.com’s Spend & Expense feature (formerly called the Divvy Card.) This credit card automates the expense management process.
  • AI tools like IBM Watson and Oracle AI are specially trained for pattern recognition, risk assessment, and fraud detection.
  • Blockchain technology is meant to keep financial data protected and secure.  Examples include ​​Ethereum, Hyperledger Fabric, and Ripple.

Close Your Monthly Books on Time

It may seem like a simple task, but getting your books closed promptly and regularly is key. This keeps things organized and running smoothly and gives business owners a dependable timeline. You’ll know exactly when this information will come across your desk, and therefore when you can analyze and adjust accordingly if necessary. We often suggest that you aim to have access to last month’s financials around the 15th of each month, but it’s important to find the cadence that works for you and your organization.

Optimize and Automate Your Accounts Payable/Receivable Processes

Controlling the flow of money in and out of your business is essential to its success. Just as thoughtful breathing can calm your mind and body, being mindful about how money is spent and earned keeps your business in check. Finding the right accounts receivable process means you’re being paid on time, which is excellent for both cash flow and your own peace of mind. Similarly, optimizing your accounts payable process means that you’re reliably paying contractors and vendors, improving your reputation and professional relationships.

Cement and Document Your Accounting Processes

Once you have a handle on your financials, it’s important to put all of your processes in writing so all parties are on the same page. This also ensures that if someone were to leave the company or simply go on vacation, others could step in and keep things current. Too often, we hear that the processes aren’t written down because “so and so knows how to do it.” But then, if “so and so” is not available, you risk everything falling apart. Having a document at the ready means that someone else can pick up the process and you don’t lose any time, effort, or efficiency.

Utilize Automating Reporting

Part time CFOs regularly see monthly managerial reports being generated by manually entering into Excel, which means there’s a risk of inaccuracy due to human error. It also takes up time that could be better spent elsewhere. There are better, more efficient ways to get this job done. For instance, in addition to the services we’ve already highlighted, there are other options like NetSuite (for expense resource planning), Microsoft Dynamics 365 (also for ERP), BlackLine (for credit management), and Deltek (for accounting and project management.)

Generate Monthly Expense Reimbursements

If someone in your organization has put out money to cover an expense, they’re going to want a reimbursement in a timely manner. The last thing you need is for that reimbursement to loom over your head and potentially lead to a disgruntled employee. So, it’s important to have a standardized, monthly process to solve this problem. As previously mentioned, we use Bill.com’s Spend & Expense tool to automate employee expense tracking.

We also always recommend that you have people on your staff with in-depth experience or education in accounting. You may be able to teach someone without this expertise your unique accounting processes, but we’ve found that this is less than ideal. We liken it to someone learning the individual notes to one song; it doesn’t mean they know how to play an instrument. You want someone how to get the most out of your financials, so deeper accounting knowledge is invaluable. Simply put, the people who do your accounting should know accounting.

4. No Roadmap

Sometimes, running a business can give you tunnel vision. Often, completing the tasks directly in front of you can occupy the majority of your time and attention. While it’s important to prioritize “the here and now,” it’s also essential to step back and look at the bigger picture. If you don’t have a strategy to propel your business forward, you’ll find yourself frequently “treading water.”

That’s why talking things out with someone who is at your level and truly understands what it means to run a business can be so valuable. We find that business owners usually have the tools and knowledge to answer their own questions, they just need to talk things through for clarity. It also helps them to remember the point of their efforts and what they’re working towards.

We’ll help you get on the right track by:

Helping You to Set Goals

Even if you start with a couple of goals, it’s important to have them set as something to work toward. Not only will they propel your business forward and give you some direction, they’ll also act as a marker for success and show you how you’ve improved and grown. This is good for morale for yourself and for your team. We’ll help you set goals for the next few quarters, or even the year.

Ensuring All of Your Goals are SMART

It’s not enough to just think up a goal and go for it. It’s critical to ensure that all of your goals are SMART. This stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. If your goals are challenging but still attainable with some improvement and effort, they can significantly impact your bottom line. Setting a clear deadline for your goals provides a well-defined direction and allows you to easily recognize when you’ve achieved your objective.

Giving You Perspective

Sometimes, a business owner is too busy to zoom out and see the forest for the trees. They’re too involved in the day-to-day details of keeping their business running smoothly, and they don’t have the time, space, or energy to focus on anything else. That’s why we make a point of reminding you regularly to take a step back and reassess the bigger picture so that you can actually grow and achieve long-term success.

5. Stress Caused by the Above

All of the above challenges (as well as many others) can weigh heavily on a business owner, as they add to the everyday stresses of running an organization. This is not only negative for your own health, but it can also lead to mistakes or missteps that impact your bottom line, causing even more stress as a result!

We can help you put a stop to that cycle. If you’re frustrated by a lack of clear financials, or the very idea of tax season has you sweating, we can take those things off your plate. Our aim is to make your business run more smoothly and simultaneously grant you more peace. That way, you can continue to do what you do best while we handle the rest.

Even if your stressors aren’t necessarily financial, we’re here to support you. If you need to vent or simply get your thoughts on paper to see things more clearly, we’ll happily put things into perspective. We’ll remind you of the progress you’ve made and provide positive encouragement to reassure you. Sometimes having someone tell you, “You’re doing a great job,” or, “You’re going about it the right way,” can make a big difference.

We often hear our clients say, “I feel more calm and positive after talking to you,” which is always one of our main goals.

This is just scratching the surface of what Fox & Partners can do for your organization. If you’d like to talk about these challenges, or any others your business may be facing, please set up a call with us today.

Let’s Work Together

With a wide range of knowledge, including finance, marketing and vision building and an ability to bring-in and communicate with various specialists to ensure optimal care, Fox and Partners is uniquely suited to bring to the business world what the medical world has had for decades – a warm first point of contact, a professional with a breadth of knowledge and coordination for all of your business and financial needs.