From Bookkeeping to CFO Support: What Businesses Need at Each Growth Stage
By Erline R.
There’s a lot of confusion among many small and medium sized business owners and entrepreneurs as to when to seek the services of a bookkeeper, an accountant or a fractional CFO. So, let’s explore the stages of growth that frequently trigger the need for each of these financial experts. As an example, let’s look at the growth cycle of a fictitious business owner named Mary, a young entrepreneur who decided to start an organic juice business located in a converted van. Mary’s business, “The Organic Juice Co.” served freshly made drinks created by Mary plus organic snacks and limited organic sandwiches along a route that her customers came to rely on. In addition, she parked and served customers at Farmer’s Markets and other local events.
The Startup Stage–Bookkeeping
While many startup owners do their own books at the beginning, they are involved in so many aspects of their business that financial reporting often piles up until the end of the month, and frankly, if dealing with numbers is not something you like doing, it’s often put off for last. It’s critical at the startup stage that you have accurate financial records, successfully manage invoices, and can reconcile accounts. Of course, accounting and financial reporting software is available to help, but you must spend time learning how it works, and software can’t help you with human error. If finances aren’t your thing, startups can go broke even if they appear profitable if they don’t have an accurate handle on how much money they have, where it is going and when it’s needed. When money falls through the cracks, if you have an inaccurate picture of how you’re doing financially, or if you don’t know if you can actually save money at the end of the month, you’re on the road to disaster. Mary realized buying supplies and serving her customers on her juice truck was a full-time job, so she sought the help of a part time professional bookkeeper early on to keep her records accurate and timely so she could spend her time doing what she loved—serving her customers.
If you’re looking to establish a strong financial foundation, a bookkeeper might be your ideal choice. The right bookkeeper can set up and maintain QuickBooks, ensure transactions are properly recorded, keep your financial records up to date and organized and advise you on cash flow. Choose a bookkeeper if this sounds like your current situation:
You need help with daily financial management.
Your business has simple, straightforward transactions.
You want to maintain accurate financial records cost-effectively.
You have a smaller budget for financial services.
You need to prepare taxes for your accountant
Depending on the nature of your business and your goals, you can run a highly successful, profitable business throughout the life of your company using a bookkeeper on an ongoing basis.
The Small Business Stage-Bookkeeping/Accounting
After a few years, Mary’s business was doing so well she decided to expand and bought a second van. She took on a partner named Sam to run the van, and they expanded her route to include more neighborhoods, more businesses and more events. As her business expanded so did her financial transactions. She got a bank loan to buy the van; each van now had a “helper,” an employee to assist in making the juice drinks and sandwiches faster to serve more customers. And a lot of questions came up that required decisions such as:
Who can approve and pay vendor invoices and to what amounts now that Sam was a partner?
Who can authorize the use of credit cards?
Who approves expense reports and are there limits on these expenses?
Who makes up the payroll and how do employees receive their pay?
Does the person reconciling the monthly bank statement receive the statements directly from the bank?
All these questions needed resolutions above and beyond the financial record keeping supplied by the bookkeeper. While many small businesses owners choose to stay at a level that is comfortable and profitable for them and continue to use the expert help of a bookkeeper alone, Mary wanted her business to continue to grow and discovered she needed services that go beyond basic bookkeeping. So, she and Sam hired a part time accountant. The accountant provided:
Custom Chart of Accounts
Monthly Reconciliations (Bank, Credit Cards, Loans)
Accounts Receivable & Payable Oversight
Payroll Coordination & Tax Filing Support
Monthly Financial Reports (P&L, Balance Sheet, Cash Flow)
In addition, the right accountant can provide owners/management with insights and data to help grow the business. Accountants can help provide strategic financial planning, especially when you have complex financial structures or when you need tax planning and advisory services that go beyond QuickBooks. Accountants can help you when you need a detailed financial analysis of your company, when you want to understand the financial and tax implications of major business decisions, when you need expert tax planning advice, and when you want to know how to use your money more strategically to achieve your business goals. Choose an accountant if this sounds like your current situation:
You need strategic financial planning beyond basic bookkeeping
You have complex financials
You require expert tax planning and advisory services
You need in-depth financial analysis and forecasting
Many medium and some small sized businesses coordinate the services of both a bookkeeper and accountant for maximum financial clarity.
Scaling -Up Stage and Beyond-Fractional CFO
If you’re like many small or medium sized business owners, there comes a time when you need to focus beyond bookkeeping, accounting and reporting to managing banking, insurance and tax planning, plus you’ll need someone to advise you on the strategic insights for growth. But like many businesses at that stage, you don’t have the budget (or need) for a full-time CFO. If you’re looking to expand, raise capital, want to set yourself up for retirement or want strategic insights on operating your business, you need the services of a fractional CFO.
In our example, Mary and Sam decide, based on their ever-expanding customer base, that it would be a good idea to open a restaurant serving organic juices and edibles in an ideal neighborhood and possibly phase out the juice trucks. Franchising the concept down the road was also a possibility. To give them high-level strategic and financial guidance for success, they choose a fractional CFO. Their highly experienced CFO will help them make smarter decisions, optimize cash flow, and stay focused on growth while giving them more time to focus on the aspects of their business that make them want to get up in the morning.
The right fractional CFO will do all this without the $150,000 a year price tag!
Financial Forecasting & Strategy
Fractional CFOs will create monthly, quarterly, and annual forecasts using your actual numbers — no templates, no guesswork.
Cash Flow Management & Burn Rate Control
Monitor cash flow, control spending, and stay liquid during growth or seasonal shifts.
Budget Creation & Profitability Planning
Set budgets that align with your business model, pricing, and revenue goals built to support profit, not just spending.
Strategic Reporting & KPI Dashboards
Your fractional CFO will help you create easy-to-understand dashboards and advisory insights to help you track what really matters.
Choose a fractional CFO if you have these challenges:
Rapid Growth that Outpaces Your Current Systems
Cash is Tight or Unpredictable
Budgets and Forecasts are “One-And-Done” and Not Rolling
You’re Preparing for M&A or a Sale
You’re Raising Capital or Refinancing Debt
Margins are Slipping or Growth feels Sluggish or Unpredictable
Complex Compliance or Regulatory Exposure
Backward-Looking Reports Only
Fire-Drill Closes
Gut Driven Decision Making
Disconnected Systems
Stakeholder Questions You Struggle to Answer
Having a fractional CFO does not mean you don’t need the services of a bookkeeper or accountant. Depending on the complexity of your business you might need all three. For example, fractional CFOs head up financial operations that can include accounting, financial reporting and analysis, tax, treasury and banking relationships, insurance and investor relations plus strategic planning and budgeting. Many of these functions rely on the information provided by your bookkeeper and accountant.
Mary and Sam’s restaurant was set up for success with the right sequence of financial planning, allowing them to do what they love. Just like our example, you can have the financial tools to make a difference for your company. At Rize Advisory we provide you with the right Profit First Bookkeepers, Profit First Accountants, and Fractional CFOs to help you achieve your objectives whether you are a start-up, small or midsized business, regardless of your goals or industry. And we’re virtual, so we can be anywhere that you are. So, if Bookkeeping, Accounting or CFO Finances aren’t your thing—that’s GREAT. Because they’re our thing. if you’d like to turn confusion into clarity and save more money every month, give us a call. At Rize Advisory we say, Do What You Love, Outsource the Rest and Rise!
For a Free Consultation, Call 855-683-2002.
Or email at: info@rizeadvisory.com
