Can a Business Thrive without a CFO?

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If you are like many of our clients you started a business that you are passionate about. And, if you’re turning to us, your business probably isn’t a bookkeeping business. (We can’t all be passionate accountants, we know, we know!)

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Did you found a bakery to follow your passion for cinnamon rolls? Do you work every day to bring yoga to people? Do you work as a lawyer, dentist, doctor, or another office professional? Whatever your specific passion is, it should be your focus.

Business owners wear a lot of hats. That’s something we say time and time again because it persistently stays true. You’re a one-person payroll specialist, back-office administrator, bill-pay expert, and you’re handling the high-level business decisions. What you don’t have, and maybe don’t know you need, is a CFO. Or, you might even call it, a business advisor.

Sometimes when we send out an initial proposal, business owners balk at the price. There is a narrative out and about that bookkeeping is the “simple stuff.”

You know, click a few buttons, give the bank a call, and it’s done!

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Really, what that reaction means is that the business owner isn’t fully understanding the true investment they are putting in when they invest in quality bookkeeping from a high-level team. It’s true that you can find a bookkeeper willing to do the bare minimum at a low hourly rate on Craigslist or LinkedIn. But, with what you’re missing out on in terms of accuracy and analysis, it’s like throwing money to the wind.

Your bookkeeping should provide you with a solid base for further analysis and decision making. Your bookkeeping firm should understand you, your goals, your business, and to be able to function as a CFO for your business using that “base.”

You don’t want to be your own CFO. Honestly, it can be difficult as a business owner to distance yourself from the numbers enough to truly see the big picture. You might not have a degree in accounting or business. This by no means makes you incapable of analyzing your business performance. But, fresh eyes, and being trained to know what to look for can help!

Cash Flow Forecasting

So, how much does a CFO cost?

An in-house executive is going to run in the higher numbers. says the average salary in the United States is about $360,000 and that jumps to over $500,000 when fringe benefits are counted.

Your business might not be large enough for that position to be necessary – but that doesn’t mean you won’t need to be making managerial accounting decisions! This is where an outsourced bookkeeping and advisory firm can come into play. The Accountix advisory and CFO plans start at around $1,000 per month. In case you didn’t notice, that is just a fraction of the cost of a full-time CFO.

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Here are the key faculties of your business that a CFO/business advisor handles:

Budgeting and Forecasting

Running budget as a small business owner can be difficult, especially as a new business owner. It is hard to predict what might be around the corner and how to accurately assess your labor costs. Having reliable numbers to rely on while drawing up a budget can help!

Through the process of running budget-to-actual analysis, a business advisor can take your numbers and put them to the test: how much did you want to spend? How much did you spend? How can you better allocate your precious funds for more return on investment?

This way you can develop an actionable plan for business strength and growth. Know what’s coming down the pipeline!

Outsourced Bookkeeping Firm

Cash Flow Management

Cash flow is so important we wrote a blog just about how to keep track of this business metric. Cash flow makes or breaks businesses. And, at the end of the day, is the number one thing that a business advisory service or back office support service will be looking at while managing your numbers.

In any successful business, you need to know both how much money you have on hand and what expenses you can predict coming your way. Managing bill pay effectively and staying on top of invoicing are two components of cash flow management but so is producing accurate cash flow projections.

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Performance Evaluation

Where are your sales up? What demographics? How are you tracking costs and revenue? Are you performing good break-even analysis? Do you have good numbers to compare your performance?

Once you have accurate reporting it is important to know how to read those reports in order to take actionable steps. Not only must you be running the correct reports, you have to then evaluate the report in order to apply the information to your business’ daily life.

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So, can a business thrive without a CFO?

Yes and no. You may not need a full-time CFO but you do need to make sure there is someone on your side looking at your important business metrics.

A good bookkeeping service is going to offer more than just bank account and credit card reconciliations, they are going to be able to do balance sheet management, debt planning and reduction, labor cost management, variable vs. fixed expense reporting, and make your numbers make sense to you.

This is the real benefit of working with one of the best-outsourced bookkeeping firms that care about quality. They’re a CFO and bookkeeper in one!