A CFO — Chief Financial Officer does that intimidate you or make you think it’s not yet for you because you’re only a small business owner? First of all, I want you to not be scared of the financial terms you’ll see in these next blogs.
They may feel unfamiliar or weird. For me, I hear words like accounting and accountant and my eyes glaze over. I zone out. Many of us do.
But these topics are very, very important. At the minimum, you need a little bit of financial oversight of your business to see where you’re going.
In these blogs, Bill Sablan of Now CFO will give us insight on financial management because financial visibility leads to better business decisions.
Your CFO shows you the bigger picture.
Better business decisions– that’s what my husband and I wondered about when I had really fast growth in my business. He’s my business manager and we had reached the point where we asked, “Are we missing anything?” “What is it that we don’t know?”
That’s what a CFO tells you. A CFO performs the highest level of financial and accounting functions within an organization.
We had our bookkeeper, we had tools and systems in place. We needed someone who could see the bigger picture, to let us know if we were hiring and budgeting correctly if we were doing the right things, and where we could improve on and sustain growth–exactly what a CFO does.
1. You need a CFO to crunch the numbers.
Your CFO will make sense of the numbers for you, so you need a CFO who has worked with your specific industry. In my case, Bill has worked with the top law firms, and therefore had a lot of experience to bring to the table.
He presented me with reports on things about which I never in my life thought to make a report:
- The percentage of my cases per case type
- Which case type brings in the most money
- Which case type brings in the least money
2. Beginning of the year strategy and end-of-year recap/looking forward
A part of the reports Bill made for me included:
- How I can bring in more money through those cases
That’s the type of strategy a CFO creates. As Bill says, “We’re here to provide you with the information so that you can make really smart business decisions.”
We meet twice a year, for the beginning of the year strategy and the end-of-year recap and outlook looking forward. He checks in with me regularly to see if I need support, but that’s it, and that’s huge.
3. Your CFO keeps you away from critical financial mistakes
We’ll discuss these common mistakes in the next blogs: ignoring or omitting financial accounting organization, management accounting and the monthly close, budgets and variances: spending money you don’t have, not having reports or a dashboard.
Maybe you want to hire someone and you want to pay him/her a certain salary. Often business owners just go by gut feel, “Yeah, I think we’ll be okay if we do this.”
Instead, your CFO will give you data and help you ask (and answer) the important questions:
- Do you have enough cash to cover that going forward?
- Where will this cash come from?
- Is this new hire within budget?
Smart business decisions
Data is everything. Bill says, “You don’t need somebody there eight hours a day helping you out. But having that concrete data in front of you while having someone shine some light on different nuances regarding the numbers as well as highlighting a few things you might not have seen is ultimately really helpful.
“That’s how you guide your business forward, having real concrete data at your fingertips.”
To learn more about managing the business side of your law firm, sign up for my Six-Figure Solo program! Six-Figure Solo now comes in three tiers – Executive, Solopreneur, and CEO. Sign up here!