Interesting question right? To answer this you first want to clarify what you could gain from having a seasoned CFO in your camp that knows your financial details even better than you do.
Let’s take a look at that first. Here are some typical benefits that come with an effective CFO:
- Better Management Meetings – nothing holds management teams accountable like clear and timely financial information. It is the ultimate measurement stick for how teams and companies are truly performing.
- Better Management Reporting – a strong CFO generally does a better job of identifying the right type of company performance information and how to report on it efficiently
- More Accurate Financial Data – bookkeepers lack the knowledge and experience to truly close out financials month over month. This leads to weak areas in financial data that ultimately needs to get cleaned up at some point. Typically at tax time before a tax accountant is willing to sign off on a tax return.
- Better Cashflow – a CFO typically optimises how invoicing and payables are managed resulting in quicker inflow and slow outflow of cash.
- Better Profitability – a good CFO will help clarify GP actually is on products and services. Without a CFO’s level of knowledge, it is often difficult to recognise revenue and attribute costs accurately.
At this point hopefully you are convinced you and your business would be under better care and guidance with a CFO on your side. But Free? How can you get a CFO for free?? If you are currently paying a bookkeeper to do your Payroll, Invoicing and Payables and you are paying a tax accountant to file your corporate returns you are likely in a position to pay the same amount and have a CFO provide you all of the above-mentioned services for no additional costs.
How is this possible? For two reasons:
- You are currently paying twice for your bookkeeping. Once by the bookkeeper and a second time by the tax accountant who has to clean up loose ends until the books are at a point they are willing to sign off on the return’s accuracy. It should only take a tax accountant a couple hours to file a return (~$500).
- Your bookkeeper is tasked with too many skills to be proficient at as a single person. Like digital marketing and IT services, accounting has become too specialised for a single person to be efficient and effective at all the required skills. This generalist approach leaves a bookkeeper exposed to being a jack of all trades and master of none – especially management accounting. This results in partial work completion at a slower than optimal pace which gets expensive.
So you can have a CFO on your team for free! You simply need to get a team of people that does their specific work efficiently and that will more than allow you the few hours a month you need to have an effective CFO making sure the money side of your business keeps ticking along.
If you have any questions on how this strategy can specifically apply to your situation contact us anytime. What you don’t know can be hurting you and your business.