Part-Time CFO Services

America’s largest, most successful businesses and non-profit organizations recognize the value, as well as the strategic and operational advantages of having an experienced Chief Financial Officer (CFO) on staff.

For smaller organizations, which account for 92% of all businesses, the value and advantages that a CFO brings to the table are virtually untapped. Because of budget limitations, many organizations are “resource-starved,” as they can’t afford to hire professional level staff such as CFOs.

But full-time staffing is not the only option. The part-time CFO is a concept that offers the smaller organization access to the experience of a CFO. Since the level of service hours can be managed and controlled by the business owner or executive, the cost can be tailored to meet any budget.

In rapidly emerging organizations, the CFO is often responsible for any functions not specifically delegated to someone else. Generally, the following defines the roles of the CFO:

  • Manage and control the accounting and finance functions for the organization. This includes the traditional responsibilities normally associated with a CFO —supervising the accounting staff, financial reporting, strategic planning, and maintaining investor and banking relationships.
  • The CFO often performs other functions. Depending on the size of the organization, the CFO may manage the Human Resources, IT (Information Technology) and Purchasing functions.
  • The CFO must be the one individual in an organization without an agenda. He or she cannot have a personal agenda . . . and must always put the needs, as well as the purpose or mission, of the organization first. An engaged CFO does considerable mentoring of other employees and managers in the areas of finance, budgeting, forecasting, product or service pricing and profit/loss analysis.
  • The CFO serves as the “conscience” of the organization. Along with the business owner, the CFO is the de facto compliance officer, ensuring adherence to federal and state business-related regulations. He is often looked to for establishing and enforcing the organization’s standards for ethical business practices and financial reporting.
  • The CFO’s most important role is that of trusted advisor to the business owner. In other words, the CFO is the one manager who “always has the business owner’s back.”

The up-and-coming trend of engaging part-time CFOs is being driven by several factors:

  1. Cost. The cost of a full-time CFO’s salary and benefits can be significant. For smaller and medium-sized organizations, salaries typically range from $100 – 200k per year. Add another 30% to cover benefits, paid time off, employer payroll taxes, training, etc . . . and the total annual cost is often too high for the average small and mid-sized organization.
  2. Complexity. The challenges facing business owners and non-profit executives these days are enormous and constantly changing. Back in 2008, could you ever have imagined the impact this recession, the credit crisis or skyrocketing unemployment would have on your business? What about e-commerce, governmental imposed regulations, the banker’s loan covenants, financial reporting?
  3. Capabilities/Knowledge. In this rapidly changing business world, owners and non-profit executives cannot be experts in all fields. After all, the majority of these leaders did not start their work life as the top person! More often than not, they worked their way up through the ranks, having started their careers as engineers, sales persons, technicians, craftsmen or any one of a thousand other occupations.
  4. Challenges/Competition. Remember the age-old question . . . who is your competition? That used to be easy to answer. What about the issue of where you position the prices of your goods or services? Do all of your customers seem to embrace the “Wal-Mart” mentality of lower and lower prices every day? Don’t customer service and loyalty count anymore? What about the never-ending growth of large box retailers, service organizations and franchisors moving into your market area?
  5. Clock. Business owners and non-profit executives have the same limited number of hours available to them as any other person. Yet, the demands on their time are unrelenting. How is a business owner or non-profit executive supposed to find the time to do everything . . . and do it well?

Business owners and non-profit executives face enormous challenges and part-time CFOs can be especially valuable resources for them. These professionals provide expertise and insight in five general areas:

  • Profit improvement and cost reduction
  • Operational accounting and business issues
  • Compliance requirements
  • Image/relationship enhancement
  • Strategic planning

Although it would be difficult to describe all of the areas where an experienced part-time CFO could add value, following are some common situations you may face which call for this type of professional:

  • Sales are up, but profits are down
  • Sales are up, but cash flow is down
  • Your managers cannot determine profitability for each product or service, division or location
  • You are evaluating a lease/purchase decision for equipment or property and need to make an informed decision
  • Your Profit and Loss reports are so late (and often so inaccurate) that you have lost confidence in using them as a managerial tool
  • You realize you need key performance data every day/week so that you can make informed management decisions and operational adjustments quickly . . . but, you need help to develop what this data should be and how to collect it
  • You are ready to expand your business, but need assistance in determining the financial impact in terms of investment, budget and cash flow
  • Your accounting staff are great folks, but they could benefit from some training or direction
  • You wish you had someone to coordinate services with your outside CPA firm or governmental auditors
  • You continue to receive costly late payment penalties because the payroll tax deposits are not made on time

Sometimes you just need a trusted advisor, who has no agenda other than supporting you, to “bounce ideas off”.

The part-time CFO offers expertise and experience in a broad scope of financial, accounting and management areas. This option offers an affordable and cost effective alternative to hiring a full-time CFO.

The significant benefits of engaging a part-time CFO include:

  • Affordability. You are not making a commitment to a full time employee. You control the costs. Typical arrangements include a modest monthly retainer and an agreed upon hourly rate for project or consulting support.
  • Scalability. You control the time involvement. You decide which functions, projects or functional areas will get support.
  • Continuity. One of the greatest benefits is that the longer a part-time CFO is on board, the more value they will bring to the table. This team member will, over time, gain more insight into the challenges faced by your business and your industry

As your part-time CFO, I will support your goals in a wide range of areas. Concerns and issues where my expertise and experience can be advantageously applied include:

Profit Improvement and Cost Reduction

  • Product or service pricing concerns
  • Break-even analysis
  • Gross margin adequacy
  • Inventory management including optimum purchasing quantities, reorder points, minimum/maximum stocking levels, inventory turns per year
  • Overhead and G&A focused cost reductions
  • Evaluation of outsourcing options

Operational, Accounting and Business Issues

  • Accounting related activities; perform monthly close-outs and prepare financial statements; review and analyze financial statements; train staff members; supervise staff members; perform internal audits to ensure procedures are being followed; answer questions and provide guidance to staff or management
  • Determine the adequacy of the administrative and accounting policies, processes and systems
  • Analyze and recommend improvements to the existing financial reporting systems to ensure a higher level of timeliness and accuracy
  • Establish performance metrics focused on real time reporting of the organization’s most important performance indicators
  • Review policies, processes and systems to identify the risk of fraud, inventory shrinkage and safeguarding of company assets
  • Evaluate cash flow requirements, including sources and projected uses of funds.

Compliance Requirements

  • Ensure compliance with government regulations related to tax deposits, payroll related deposits and all other mandated reporting
  • Set up procedures to compile data and prepare accurate and timely reports mandated by covenants associated with bank loans or credit lines
  • Identify risks linked to having inadequate or faulty human resources procedures. Recommend professionals to guide the implementation of appropriate procedures to prevent lawsuits or other legal actions
  • Coordinate and collaborate with the outside CPA firm to ensure timely, cost effective completion of audits, compilations or annual reviews. Work collaboratively with the outside CPA firm to comply with all reporting deadlines.

Image/Relationship Enhancement

  • Facilitate the development of professional and mutually beneficial relationships with the company’s bankers, financial backers or investors. Assure compliance with any covenants or information requests.
  • Serve as primary point of contact with the company’s bankers
  • Serve as primary point of contact and coordinator with the company’s CPA or accounting firm
  • Assist in the negotiation of contracts or service agreements with vendors or outsourcing partners
  • Provide employee briefings and answer questions related to accounting, payroll, fringe benefits or other matters related to administrative or accounting procedures.
    Strategic Planning
  • Budgeting, forecasting and planning
  • Prepare risk analysis associated with expansion or acquisition of a new product or service line
  • Determine and advise management on the most cost effective way to finance expansion, capital equipment or real estate
  • Evaluate the impact of long term pricing policy decisions
  • Analyze the feasibility and potential benefits of establishing formal customer loyalty programs
  • Evaluate/develop plans for the addition of new business locations
  • Assist in the planning involved in positioning the business for sale or acquisition

The emerging trend of using a part-time CFO makes perfect sense in this economy. The service levels are scalable, affordable and relevant.

As your part-time CFO, I will not replace your organization’s CPA firm, which specializes in preparing tax returns and attest-to work such as audits. Instead, I will partner with your CPA firm and work collaboratively to further your organization’s goals. My part-time CFO services are operational in nature and focus on the day-to-day operation of your business, as well as on strategic planning.

A part-time CFO who can effectively address the business issues you either can’t or don’t have the time for, can make an enormous difference in your business. In fact, it’s a service that you probably can’t afford to do without.

If you’re in the Omaha/Lincoln, Nebraska metropolitan area, give me a call or drop me an email. I would love to stop by your business and discuss how I can help transform your business using the Bible as our guide. There is no cost or obligation to discuss your situation and the strategy I would implement to help you.

When deciding whether or not to contact me, here’s a few things to consider:

  • I won’t service companies whose products or services are incompatible with Scripture. I also won’t serve companies that take advantage of employees or vendors or are bad citizens in their community.
  • Is your business committed to principles of honesty and integrity? Companies that fudge the numbers, mislead customers or fail to honor commitments are not good candidates for my service. This isn’t just a moral issue – honesty is just good business.
  • Is your business model viable? If the business model is flawed beyond repair, I won’t get involved. I need to believe the business has a legitimate chance for profitability and success. However, just because your company may be unprofitable and in deep financial trouble doesn’t necessarily mean the model is flawed. I’m not afraid to get involved with troubled businesses (I believe God’s business principles can transform your unprofitable business), just those that have a flawed business model.

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