The Rise of the Fractional CFO Firm - VI
One word: Trust
PART 6 of 6
Trust is only going to grow in importance as we transition to an online business world.
Trust is the currency of business; increasing trust drives better execution of everything.
Slow down and do your due diligence when selecting a Fractional CFO Firm.
Trust was important before everyone started working remotely. It has been the bedrock of the CPA profession from day one. When looking for someone to fill a Fractional CFO role at your company, slow down and do some due diligence to understand what they are all about. Are they visible in the community, online, and as a thought leader? They should be able to provide references from business owners like you. Call their references! This sounds obvious, but we are often in a rush and need to identify someone quickly. Some due diligence upfront will make sure you are getting an excellent fit for your needs. These are long-term relationships, so it is worth it to slow down and make sure the firm is right for you and your company. I would guess over 50% of the Fractional CFO sites that I go to have no pictures of the team or their leadership. That does not build trust. They either don’t have the basic technical skills to create a proper website, or they don’t have a team to support them.
Besides cultural fit and the firm’s experience, there are a few other items to ask about when selecting a firm. First, talk to the potential firm about your unique challenges and their experience solving them. Technology is a force multiplier. Leaders, especially CFOs, should not only be extremely knowledgeable about the technology impacting SMBs, but they should have a well-thought-out opinion about how that technology will impact your business and what steps should be taken to give you an advantage. Secondly, ask them about their security practices. You will have to share a lot of personal information and information that is proprietary to your business with them. They have a responsibility to protect it. Get a sense of how they are doing that and if they understand best practices. This can be hard if you don’t know them yourself. That is fine; ask them to educate you. That is their role if you select them. Let’s see how they do.
The fact that the CPA profession is discovering advisory services again is an excellent opportunity for SMBs. CPAs have a lot to offer the business owner. In the past, higher-paying compliance-related work limited CPAs’ willingness and availability to do advisory work. Competition for compliance work has driven pricing down, and new technology on the advisory side has enabled firms to leverage economies of scale. This all adds up to an excellent opportunity for SMB owners to lower costs and get better insights into growing their businesses while dealing with fewer administrative headaches.