How a Fractional CFO can Transform Your Business Needs

Small businesses are created by entrepreneurs who have the vision to build something great. And although most of them have an amazing financial aptitude, their first task is to start-up and grow their company.

Small businesses are created by entrepreneurs who have the vision to build something great. And although most of them have an amazing financial aptitude, their first task is to start-up and grow their company. As they focus on what they do best – their product or service, often, the accounting side can fall short. A Fractional CFO can help transform a company by providing automation that can be used to drive the business forward.

Why waste the time and resources operating in the financial dark ages, not getting the data that can help guide good financial business decisions when there is a better, more lucrative, and inexpensive way to operate? Our Fractional CFO system saves our clients time and money, and best of all, it takes their company to the next level.

Case Study – The CFO Transformation

In September of 2012, a business in the Charleston area first opened up. Luckily, the concept was exactly what was needed, and the business hit the ground running, literally. Not so luckily, the newfound cash flow was a bit more than was anticipated by the owner, and he quickly found that he could not both focus on the business at hand, while simultaneously taking care of all the many financial facets that go into owning and operating both a brick and mortar and online retail store.

In his attempt to keep things close to home and manage his books, what was getting lost is the wealth of information that continually analyzing your financials can do to further your bottom line. Our client found out the hard way that letting your financials go unchecked and paying attention to them only when absolutely necessary, might not be the most profitable way to run a small business.

The Downfalls of Business Growth, While Accounting is Left Behind

About two years ago, I walked into my clients store and struck up a basic conversation while shopping. I instantly got the sense that there was a way that we could take his business to the next level. They had a custom-built Point of Sale system (POS) to manage their inventory, with a part-time bookkeeper who managed their QuickBooks file.

When we first met, they didn’t really have much visibility into how the business was doing financially other than being able to see their in-house POS system totals at the end of the day. That is how we typically see people operating their small businesses. Small businesses grow and expand, but their accounting systems don’t. In most instances, over time, as business owners are focused on the expansion of products and sales, they tend to neglect their accounting system entirely or leave it well behind.

Bringing Accounting up to Speed with a Fractional CFO System

He agreed to allow me to peruse through his finances to get the full scope of where things stood. After several meetings, we put a tailored plan together that was specific to his situation, which outlined a way to tackle each item necessary. We moved their accounting system to the cloud – QuickBooks Online. And then we linked all of their company bank and credit cards with a setting to sync automatically, allowing them to immediately reconcile their balance sheet.

From there, we took several year’s worth of tax returns and everything that could be deducted and accounted for, because, in a perfect financial system, every advantage is taken, but when the accounting side of a business is lagging behind the rest, chances are, several things are missed.

Automation Takes Human Error out of the Equation

Being that he was running a retail shop, the majority of the inventory sources were stuck in the dark ages technology-wise. As an example, many retail stores are unable to email invoices, which leaves a lag in the AP processing. Instead, invoices are mailed, and then it is the responsibility of staff members to collect the mail, sort through the invoices and, in the end, hope that all the invoices are paid and accounted for.

But with daily operations moving along, often, many of those invoices are left unpaid, leading to poor credit from collections and “nasty-grams” about missed payments. We were able to completely automate the company’s AP process, whereby invoices are automatically funneled into Quickbooks Online. And we were able to set up weekly reviews that alert the need for approvals with payments handled directly through QuickBooks Online.

By moving everything digital, we took the financial ominous off of an individual, making it more precise, automatic, and traceable. Even better, the cost of the new operating system for them was less than it takes to order check stock, not to mention the subtraction of postage and man hours. Even ACH and credit card payments can now be handled directly through QuickBooks online.

Using the Data in Daily Operations to Make Smart Decisions to Move Business Forward

Finally, we implemented sync between their custom POS and QuickBooks Online – allowing them to see profitability per customer to pinpoint areas of improvement and true data based on periods when their traffic is at its peak. Going forward, they can use that data for more precise scheduling to improve customer experience and satisfaction.

As a result of all of our efforts, we took their accounting process out of the basement and turned it into a tool they can use to drive the business forward. And we’re not done, there are plenty of other cool things that we are currently working on to make them even more financially successful and profitable.

Your job as an entrepreneur is to focus on the expansion and growth of your business venture. With so many things on your to-do list, it is easy for accounting to fall short or maintain the minimum. But when you have a Fractional CFO system in place, it operates without human error and automatically. It also supplies you with the data necessary to enhance your business profitability and daily operations to take your company to the next level. Contact us to see how we can work together to get you up to date and experiencing the maximum profits imaginable.