Why Hire a Part-time CFO – Part 1 – Changing Your Status Quo

BankerThis is Part 1 of a 3-part series on Why Hire a Part-time CFO.  This article talks about the first step to take, once you decide that your current financial state is simply intolerable.

Over recent years, small business CEOs have become more aware of the consequences of failing to take action.  These CEOs carry a growth mindset as opposed to a fixed mindset and realize that continuing to tolerate the status quo is putting their business farther and farther behind the competition.

But where do you look to find a high-quality part-time CFO?  One that you can fully trust but as important, one who can get the job done?

A quality CFO has industry knowledge, problem solving skills, flexibility in methods, efficiency, and hyper-qualifications.  They should not only organize company finances but also be a first-rate problem solver.  They need to be flexible in changing their methods to fit the nuances of your business.  They need to work fast to improve the bottom line.  And finally, they need to be more qualified than any person you could hire as a full-time salaried employee.

The core value of a CFO consultant includes CEO advisory on major financial issues, strategic plan re-focus, execution of key initiatives, business funding and debt, litigation support, and facilitating key sales and financing transactions.  Matters like these are often complex and urgent to the business but can be handled by a money saving part-time CFO consultant.

Additionally, a great CFO consultant is well-versed in small business systems including   customer relations management (CRM), HRIS, digital marketing and lead generation.  This is to ensure you have a single point resource that understands all aspects of the business.

Onboarding a consulting CFO is simple and immediate and carries no long-term financial commitment.  Hiring a part-time CFO is ideal if a) you need a specialist, b) you need to act fast, c) your in-house team has problems, d) you don’t need more office workers.

(Next:  Why Hire a Part-time CFO – Part 2 – Built On Trust: the CEO to CFO Relationship)

To learn more about our affordable, flexible, part-time consulting services, or to get a free CFO review of your financials, call Arima Business Solutions today.

818.710.3899 | info@arimabiz.com. | http://www.ArimaBiz.com

Did Accountants Build the Great Pyramid?

great pyramid of giza

Of course not.  But a great pyramid of accounting talent is often needed to have a high performing team.  This is true for large companies, and sometimes it feels like you can never have too much accounting talent.  But for smaller companies, staffing even a few of these positions full time can be difficult to afford.  Small businesses also experience more ebbs and flows in accounting workload than larger companies.  They may need a lot of help at year-end and during tax season but may need less help during the dog days of summer and the holidays.  The below accounting pyramid shows the average compensation for common accounting positions.

Website blog - pyr and callouts
(source: Glassdoor Feb 2019, Los Angeles area, plus 25% employee benefits load)

Using these budgets as a point of reference, let’s look at the cost of a typical small business setup of General Accountant plus Controller.  This pair costs $236,552 annually, or $19,713 per month.  This is a permanent monthly fixed expense since these are full-time employees on payroll.

Alternatively, a part-time CFO paired with a full-time Bookkeeper costs only $7,971 per month, or 60% less than the $19,713 full-time Accountant plus Controller. With a CFO, processes and controls will be created so that a Bookkeeper can competently handle the day to day. The true cost of this option will of course vary.  The complexity of the work, the frequency and intensity of pre-existing problems, are two factors that influence how many CFO hours are needed per week.

The good news is that more and more small businesses today are seeing the flexible consulting CFO model as a much better fit for their unique situation.  They can avoid being overstaffed today then understaffed tomorrow.  Right-sizing accounting resources is one of many reasons the part-time CFO model has become increasingly popular. It has become an attractive option for small businesses that:

  • Need a specialist, fast.
  • Want a flexible budget that fits the week-to-week or month-to-month workload.
  • Want to avoid long-term cost commitments.
  • Want to avoid the rigor of hiring and firing.
  • Want an experienced large company CFO that fits their small business budget.

This cost analysis is not suggesting that either option is superior to the other one.  But we should do what we can to raise awareness.  As a small businesses, did you know that having your very own best in class accounting function is very much in reach?

 To learn more about our affordable, flexible, part-time consulting services, or to get a free CFO review of your financials, call Arima Business Solutions today.

818.710.3899 | info@arimabiz.com. | www.ArimaBiz.com

The Three Biggest Problems Facing Today’s Small Businesses

not enough cash flow • too much stress and anxiety • not enough free time

We had previously introduced to you the idea that time, money, and stress, represents the most persistent problems facing small businesses today.  To expand further on this notion, and to accept the fact that no two small businesses are the same, it is important to isolate where, and to what degree, time, money and stress issues have infiltrated your small business.

We created a checklist, so that small businesses can “self-assess” whether problems related to time, money, or stress applies a lot, a little, or not at all to your situation.

The checklist items start with “I am having problems with …”

  • getting some outside expertise and resources which will allow me to focus on sales, new services, new customers and other priorities, instead of other things that often sidetrack me.
  • gaining a better understanding of the financial side of my business, to know the truth about my business finances so I can make better decisions, while eliminating unwelcome “surprises” caused by relying on inaccurate, unreliable, late, incomplete or misleading financial information.
  • finding a business partner that can serve as a sounding board or second set of eyes, one who will give honest feedback on my business, good or bad.
  • having a safety net or warm fuzzy blanket, to give me peace of mind. For example, a CFO that is “on call” to periodically check your numbers and advise you of problems before they happen.
  • improving my credibility with stakeholders, investors, management and staff. To have them trust that I have a confident grip on my financials.
  • installing, quickly and easily, a system of checks and balances, to monitor and protect my cash always. To minimize the risks of dishonesty, fraud, waste and harmful mistakes.
  • automating my back office, to improve profit margins while reducing time wasted on the day-to-day.

To learn more about our affordable, flexible, part-time consulting services, or to get a free CFO review of your financials, call Arima Business Solutions today.

818.710.3899 | info@arimabiz.com. | www.ArimaBiz.com