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 Cash Flow Compass

Weekly Saturday Newsletter

1 actionable tip, idea, or insight to boost your service business finances and shed your stress. New edition every Saturday.

CFC #014 - The Risks of Using a Bookkeeper or CPA When You Need a CFO

Aug 12, 2023

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." – Sun Tzu

Every business, regardless of its size, thrives on a balance of tactics and strategy.

For example, you need accurate books to understand your business’s current financial condition.

You also need a sound strategic plan and financial forecast to transform your current business condition into your dream financial outcomes.

Yet, one of the frequent missteps I’ve observed in my tenure working with various businesses is the unintended delegation of strategic financial responsibilities to tacticians like bookkeepers or CPAs.

Now, don’t get me wrong. Both bookkeepers and CPAs play invaluable roles in a business's financial health.

They can ensure your finances are recorded accurately and that you’re compliant with tax regulations.

However, when it comes to crafting and executing a financial strategy, that's where a fractional CFO is a logical fit.

Let's delve deeper into the potential consequences of using bookkeepers and CPAs to fill strategic roles that a fractional CFO might be better suited for.

3 Unintended Consequences of Bookkeepers and CPAs in Strategic Roles

  1. Limited Horizon: Bookkeepers and CPAs are trained to look backward and record what has happened, ensuring everything aligns with current regulations. A fractional CFO, on the other hand, looks forward, planning for growth, managing risks, and ensuring financial stability for the future.
  2. Sub-optimal Strategies: A CPA might suggest strategies that offer tax benefits, but these strategies might not always align with your business’s long-term financial goals or growth plans, leading to conflicting directives.
  3. Missed Opportunities: Without the forward-looking vision and in-depth financial understanding that a fractional CFO brings, businesses might miss out on profitable investments, growth opportunities, or even risk mitigation strategies.

3 Surprising Reasons Why Fractional CFOs Are Essential for Financial Success

  1. Decision-Making Support: While a bookkeeper or CPA may present you with financial reports, a fractional CFO will help you use your business’s numbers to make better decisions.
  2. Executive Accountability: Fractional CFOs are executive-level business partners. They can help keep you accountable for upholding your commitments to achieve your desired financial goals.
  3. Financial Leadership: A seasoned fractional CFO is both a CFO and a CEO for their own business. As such, they bring both financial and operational expertise and experience to the table that can help guide your business where you want to go.

What’s next?

Pondering if your business's strategic financial work is in the right hands?

Book a free strategy session here.

Let's explore how a fractional CFO could be the strategic guide your business needs to navigate the complex world of finance.

Stay tuned for more insights to empower your business decisions and ensure you're on the right path.

Until next time!

In the meantime, if you’re looking for more, there’s a couple ways I can help you:

  1. Watch my free on-demand training on my 5-step system you can use to get the financial results you want from your business and feel less overwhelmed. Free training here.
  2. I can help free you from financial stress in your $1M+ services business and discover a faster route to the results you need for the life you want. Book a call here.

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