Are YOU Ready to Start Offering CFO Services?

Ah, yes, CFO services. Everybody's talking about them. 9 out of the 10 coolest CPAs you follow on Instagram offer them. And you think that you might be at that point in your career where you're ready to start offering virtual CFO services. But then you realize you're not sure what a virtual CFO is. In fact, you don't even know what services a virtual CFO should be offering. That's why I'm excited to kick off a four part series on all things CFO services. And today we're going to start by talking about the difference between a virtual CFO and a bookkeeper or an accountant. Before we begin, I want you to head over to the AICPA's website and I want you to search for virtual CFO. What you're going to find is that the AICPA basically has absolutely nothing to say about what a virtual CFO firm is. But if you head over to the IRS's website and you search fractional CFO, you'll find that the IRS has nothing to say about it either. The truth is, there is no standardized definition as to what a CFO service should look like or what the qualifications are to offer those services. The good news is that means you get to decide for yourself, for your own firm, what those services look like for you. That's right, folks, us virtual CFOs, we are living in the wild, wild west of financial strategies. Now, I've had a fractional CFO firm for the last six years and so I've developed some perspectives around what I think a fractional CFO firm should look like. And so I hope that these next four videos give you some direction or inspiration as to what a fractional or virtual CFO service might look like for your firm. Before we get into the nitty gritty today, I want to point out that you're going to hear it. Three words used interchangeably in these videos and out in the wild. Those terms are virtual cfo, fractional CFO and outsourced cfo. Those words are completely interchangeable. They're just a matter of marketing or branding preference for the business owner. I picked fractional CFO for my firm. And the reason for that is because I did some Google Analytics research and I found that more people tended to search for fractional CFO services when compared to virtual or outsourced CFO services. You get to decide for yourself what kind of CFO service you want to be. You do, you boo and you live your best life. Let's start our discussion by talking about, at a super high oversimplified level, what bookkeepers and accountants do. Bookkeepers and accountants do what I like to refer to as rear view mirror reporting. You're talking about and reporting on things that happened in the past. For example, you are reconciling bank statements from last month, or you're categorizing transactions from last week, or you're providing financial reports from last quarter or last year. All of those things are things that happened in the past. And that work is critically important for literally every single business. It's important because you need to understand what your financial performance was in the past so that you can make smarter decisions about the future. It's also critically important for compliance purposes. But here's the thing. Business owners, their goals, their dreams, their aspirations, those things all live in the future. Business owners, especially those that are in growth mode, they need somebody that can help them put a financial plan in place to help them reach their goals. They need somebody that can come in and help them understand if their strategies make financial sense. They need somebody to come in to help them take their goals and dreams and aspirations and put some financial legs under them. And that's where the fractional CFO comes in. Your job as a fractional CFO should be to help business owners plan smarter for the future. Your job is to be the one that's helping them look forward and to understand how their decisions are going to impact things like profitability and cash flow and taxes. And the amazing thing is that there are so many business owners that are looking for that kind of support right now. And why is that? Business owners just aren't good at looking through the nitty gritty of the numbers nerd stuff that you and I take for granted. Yes, business owners understand that profitability is important, but they don't normally know how to think through how their new marketing budget is going to impact profitability in two quarters. Yes, business owners understand that cash is important, but they don't know if they have enough cash to fund their new hiring strategy. Yeah, business owners understand taxes are due in April, but they don't know how to think through how much money they need to set aside now so that they won't be short when the bill comes in. But the good news is you do know how to calculate those things. You do know how to think through those things. And that's why business owners love working with virtual CFOs. That's why virtual CFO services are so valuable to business owners, especially those businesses that are in growth mode. And that's why CFO services typically pay so much more than bookkeeping or accounting services. All right, I want to share one final thought with you. And if you've got a pen and paper, I want to encourage you to write this down because it's critically important. And, and I think the reason for that is because what I'm about to share with you is the difference between a good CFO firm and a world class CFO firm. Yeah, virtual CFO services, they're all about providing those forward looking financial perspectives. But a world class virtual cfo, they're also a world class teacher, they're also a world class coach. And the reason for that is you have to be able to communicate your perspectives, your insights, your thoughts around what they need to do in a way that the business owner understands. You've got to be able to take all of your accounting jargon and break it down in a way that the business owner can take that and leverage it to make smarter decisions in your business. And I would argue that the hard work of a fractional CFO isn't the financial analysis. The hard work is learning how to take what you're seeing in their financial strategies and translate that to the business owner and in a way that they can truly understand it. And it becomes a tool to empower them to be better business owners. So the TLDR here, bookkeepers and accountants, rear view mirror looking. Virtual CFOs, fractional CFOs, outsourced CFOs, forward looking. Both are critically important to a business, but both are very different services. All right, I hope you enjoyed our first part in this four part series on CFO services. Be sure to check us out next week where I'm going to break down the fourth four core services that I think fractional or virtual CFO firms need to be offering. See you then.