My EXACT CFO Report for 2025 (what we sell to clients)

People start doing dumb stuff with their money because they got this false sense of security about their cash position. But then you turn over to the statement of cash flows and you look at the cash generated by operations and it's negative. It is fractional CFOs. If we're not going through that statement of cash flows with them every month and saying, look, I know it feels good right now, but you lost $30,000 last month from operations. This is the cool stuff. So, so what does that look like for us? Right at the heart of our service is a thing called the CFO Report. Once a month, maybe once a quarter, depending on the size of the business, we get on a call with our clients and we deliver this thing called the CFO Report. It's kind of the heart of our service. Right. Everything we do centers around this. It drives all of our conversations. So I'd love to just walk you through, like, how do we do this? How do we take this simple model and apply it to a multiple eight figure business? They just keep coming back year after year after year and having more and more impact. We start off our CFO report reviewing the Critical 4. If you've been with us for one month, we review the Critical 4 at the start of the call. If you've been with us for 100 months, we review the critical four at the start of the call. We're looking at a 13 month rolling time period of revenue, gross profit, net profit and cash. And as we get into this, I want to kind of give a disclaimer or a warning. I want you to remember that what my firm does may not be the thing that your firm has to do. This is what's worked for us and our team and our clients and the people that we serve. You might need some version of this for yours. Remember, this isn't about duplication. It's about inspiration, good memory. So just think, like, how can I apply some of these concepts of simplicity into what I'm doing? So we go through the critical four. I like 13 months for a couple of reasons. One, we get last month, in the same month, last year to compare year over year. And then I like to be able to see trends in between. Right. We're looking for trends, so we're going to review numerical values with them, but we're also going to look at graphical values. The graphical representations make it so much easier to see trends than just looking at the numbers. So 13 months, revenue, gross profit, net profit, and cash. What things don't make sense, Anything that sticks out so you know, in this particular example, we can see in the latter half of this time period, revenue is pretty flat after that huge spike. But revenue or net profit rather took a pretty big dip in that particular period. Cash took a pretty big dip. What happened? We see gross profit was flat. What's going on? I don't know. That's where the conversation with the business owner comes in. Was this something that was unplanned? Right. Do we see that gross profit margins are trending down when we look at it over the last 12 months? Are we aware of what's driving that? Maybe we are, but it's a basis point for those conversations with the clients and making sure that they're aware of what's going on. And guys, cash too, Right. The cash trends are the most important, my opinion anyway, for most businesses. So we start off, we're going to go over the critical four review. Next we're going to dive into the p and l 12 month review. As we go through these, I want you to remember, especially on the P and L, ladies and gentlemen, I want you to keep one thing in mind. You need to be operating as far away from the decimal point as possible when you're reviewing the P and L. This is not the time for your clients to say, we spent $846 on travel last month, but I believe that should be meals and entertainment because of xyz. That's not what we're doing on this call. Even if you are a firm that also offers bookkeeping and accounting, this call is for strategic things way far away from the decimal tens of thousands, hundreds of thousand dollars types of conversations. If you're offering Bookke, an accounting service as well, I would encourage you to have a separate call to go through those things. Because the problem is the danger with that is if you don't have a space to talk about the strategic things that are going on in their business, they're going to pigeonhole you as a transactional supplier. They're going to pigeonhole you as a bookkeeper or as an accountant. And they're not going to see you as that strategic partner that we all want to be seen as. So you've got to be really good at having those boundaries on this call. Bookkeepers and accountants that are also doing advisory work don't get sucked into things close to the decimal or you're not long for life with them.

I know how hard it can be to build a fractional CFO firm. We spend our entire careers learning the technical side of things, but not enough people talk about how to build a business around it. The work is hard and I know that it can get lonely and if we're not careful, we can end up losing our passion for the work and ultimately we just burn out. For me, I realized that I needed three things in order to get my fractional CFO firm to the next level. I needed next level training from somebody who had been there and done that before to show me how to get my firm off the ground and how to scale it up. I needed to be around a community of other fractional CFOs that shared my energy and passion for the work. And third, every so often I just needed a jolt of energy, a fresh spark to reignite my own passion for building a fractional CFO firm. If you're looking for that next level training, the amazing community, and that jolt of energy to get your fractional CFO firm unstuck and on a new trajectory, then I'd like to invite you to join our industry's only conference in the world, the 2025 CFO Accelerator Live, happening in Orlando, Florida May 21 through 23, 2025. Over three days, you'll hear from me and some of the successful fractional CFO firm owners is we share the lessons that we've learned in building and scaling firms. You'll get to network and collaborate with hundreds of other fractional CFOs from all over the world. Firm owners that serve every niche you can think of and with every type of firm business model you can imagine. You'll walk away from our three days together with a renewed passion and excitement to get you back to your office and start scaling your firm and your impact. Click the link below to grab your tickets. And here's my promise. The price shown in that link is the absolute lowest price we're going to offer. If you wait, you will pay more. So grab your tickets today and join me in Orlando, Florida May 21st through 23rd for the CFO Accelerator Live. If you have any questions, just text LIVE to 1-469-515-8087. I cannot wait to see you in May, my friend.

So we're going to go over the pl. We're looking at the things that are as far away from the decimal point as possible. Then we're going to go into the balance sheet. Show of hands here. Integrity. How many people here every month or every call go over the balance sheet with your clients? Maybe some opportunity here. Everyone does P and L, right? Everyone's talking about the P and L for the most Part balance sheet, a little bit less. And now, since we've all agreed to be integris with each other, that's a sounding word if I've ever heard one. Now that we've agreed to be integris, how many people go through the statement of cash flows with their clients every single month? Notice the percentage of hands that are up now compared to the others. I would put up a really hard argument that the statement of cash flows is more important than the P and L or the balance sheet. We could fight over, arm wrestle or something. I don't know. It shouldn't be neglected though. The statement of cash flows is treated like the redheaded stepchild of the financial statements. And there's some really valuable information in there. And I'll tell you, like the big time that that came up where it's so important. How many people were were in business during COVID when PPPs and EIDLs came out? Most of us, right? It's so weird. Half the room is all, yes. And then a couple people over here. How many of you had clients is the PPP money and the EIDL money started getting distributed? How many of you had clients that were like, walking a little bit taller because they got all the money in the bank, Right? Like I'm balling over here. I'm crushing it over here. We're buying this. We're, you know, new Mac, let's get a new Mac, let's get four new Macs, right? This is the time for the trip to Tulum. Tulum, Tulum. I don't know how to say that place. I was told yesterday, I say it wrong, right? People start doing dumb stuff with their money because they got this false sense of security about their cash position. But then you turn over to the statement of cash flows and you look at the cash generated by Operations and it's negative. Oh, no, my friends, it's not time to go to lum. It's not time to go to Cancun. Those loans, just as an example, gave so many business owners this false sense of security about the financial health of their business. It is fractional CFOs. If we're not going through that statement of cash flows with them every month and saying, look, I know it feels good right now, but you lost $30,000 last month from Operations, right? Makes sense. So you got to hit all three of those every month. In my opinion, I think you're doing a disservice to your clients. And if you're not hitting on them every single month, for those of you that are in inner circle, we did a whole training on how to present statement of cash flows to your clients a couple months ago. So if this is an area of opportunity for you, like how do I communicate this to my clients, you might want to go back and take a refresher. Some pro tips on how to do these, These reviews, number one, I like to look at 12 months. You know, 12 months is far enough into the past that it's, you can see some trends and you see what's going on, but you're not getting into the weeds. So I would say make sure you're looking back at least 12 months. Keep it high level, stay away from the decimal, don't skip the statement of cash flow. Man, if, if I got one pinky promise from everybody in here and it was, I'm going to start going over the statement of cash my clients every month, I'd feel like I had a great conference here. And we look at the statement of cash flow here. Remember, don't keep, don't complicate it. I think for most businesses that are in the SMB space, that top portion up there, net cash flow provided or consumed from operations, activities, that's normally the big one. Right now we can get into some stuff under investing and financing, show them you know, how much money is going towards paying off debt and those things, or you get the clients. I mean, how many times have you heard clients say this? Especially like leads when we get on a sales call where they'll say, and we were so profitable last year, but none of that money came to me. I want to know where my money's going. Like that's one of the big triggers that'll get somebody to hire a fractional cfo and they don't understand where that cash went. They see the P and L, they see the nice number at the bottom, they get the tax bill, but they don't have any money to show for it. Well, let's scooch on over to the statement of cash flows and see what happened last year. You can't get that kind of insight if you're only looking at the P and L. Don't have that myopic look, that myopic view of the financial statements. You've got to look at all three. You got to incorporate all of those in there. And again, just so you can see a little better, that top part, don't overcomplicate it. You know, there's some stuff on the balance sheet assessment. You start getting into like the, the equity Sections like people, their heads start spinning unless they're not in that. You know, if it's a company that hasn't done some of the more advanced financing things, they don't understand what that stuff means. Skip it if they don't need to understand what it means. In total, that review of the critical for the PNL, the balance sheet statement of cash flows, our CFO calls are typically like, let's call it 60 minutes. That's all rear view mirror looking stuff though, right? Our job as fractional CFOs is forward looking work. Can we all agree with that? It's how do we help them move forward? So we're spending 10, maybe 15 minutes total on all of that. Then we get to move into the cool stuff. Now we get to move into the forward looking stuff. So we'll start off with forecasts and projections. We keep our forecast and projections looking a whole lot like critical four. We keep it simple for them. Revenues at the top, we'll typically have this look a whole lot like their chart of accounts so it matches up roughly with the P and L. Now all of a sudden on one 12 month spreadsheet, they can understand how much cash they have in the bank this month, what all their expenses are, where all their cash is going and how much cash they're going to have left at the end of the month. And we do this 12 months out. But here's the cool part about it. Times are looking better, profits are up. Can we get the 3D printer now? I don't know. Let's go over to the forecast and projections, shall we? So we go over there and we'll add in a line item, right? We'll put something in there to show that 3D printer. And then we walk them through how we think about it. All right, so you want to buy the 3D printer next month? It's $4,000. Let's plug it in. How does that impact our margins? How does that impact our cash? Can we afford to do that for me as your cfo? It doesn't make a lot of sense for these reasons. Or maybe it does make sense. If that's what you want to blow your money on, blow it on a 3D printer. We can do it all day long, right? You're the CEO, go do your thing. The magic though happens, ladies and gentlemen, when you enforce that behavior time and time again. And now they don't have to call you to ask if they can buy the 3D printer. How many people get bombarded with questions like that, right? Does it make sense? Right? Or if they want to do pay raises, can we afford to do the pay raises? They can internally, as a team, do the napkin math using this spreadsheet that you give them in your CFO report to empower them to make decisions without you. Then when you get on the CFO call, they're like, hey, we're looking at doing a 3% pay raise across the board next year. This is what the finances we think should look like. Can you give me your opinion? Did we miss anything? Are there any potholes that we're not thinking about? Oh, yeah, you guys forgot that with the, the increase in pay, it's also going to probably bump up your 401k contribution. Matches that you have to do. Let's plug that into. Right. We get to start doing some. I think that's just cooler stuff. Or they get up when you start getting to the next phase with them, which we'll talk in a minute, where they've got some actual legitimate goals beyond, I want to make $5 million a year. When they have some actual, you know, tangible goals that create impact, you can say, yeah, you can afford that now, but let's see, how is that going to impact your ability to do this next year, this big thing that you wanted to do? That's some fun stuff. That's where you get to start. To me, that's where the fractional CFO stuff starts coming into play when you have those opportunities to talk about the longer term things with the bigger investments with more impact. So every month we're going over these forecasts and projections with them. 12 months. Every month we update it. It's got everything they need to understand the financial health of their business right there. So let's review the deliverables. So far. 5,000. Actually, we're at $5,500 a month for our base service. What are they getting? We're going to review the critical 4 revenue, gross profit, net profit and cash. We're going to go and review 12 months of their financial statements. We're going to update the forecasts and projections with them and then we get to work on goal setting. This is the cool stuff.