In this episode of the CFO project podcast, we answer your questions around what exactly a CFO advisor does.

Welcome to the CFO project podcast. Today we're talking all about what exactly CFO advisors do to help me with the discussion. I've invited Hannah Smolinski, the CFO of the Klara CFO Group. Hannah, welcome to the show. Hi, Adam. Thank you so much for having me. I'm really excited to be here today. Yeah. So I'm excited to bring you on because you are a practitioner.

You you offer CFO advisory services and so you walk the walk, the walk, I walk the talk. And so I think it would be a great idea to have an episode around what exactly advisory services do. And since you're doing it, I think this would make a great podcast episode. So let's kick it off with our very first question.

Maggie wants to know, how do I overcome imposter syndrome? I'm a bookkeeper. Can I really become a CFO? That is a great question, and I get that a lot. So Hannah's kick us off. Yes. And I love it. It was Maggie, right? Maggie. I love her question because I feel like we've probably all been there. You know, imposter syndrome is something that, I think very few people, who have who have a realistic sense of self, have never, experienced some imposter syndrome.

So, I think the important thing to remember is that, you know, when, when you do work in the accounting space, whether it's bookkeeping or taxes or you do are offering some kind of advisory service, you know, if you understand financials and you understand how accounting works, you are more informed than 99.9% of the population around finances. And, you know, I think getting hung up on a title of like CFO, I think about this all the time.

Like, can I go and be the CFO of Amazon? No, I'm not qualified. You know, I'm not I'm not qualified to do that. But, you know, am I qualified to give financial advice to small businesses because I understand them? I live and breathe their financials every single, single day. You know, I am so I think like for Maggie, you know, think about like, encourage yourself of how much you do know.

I think it's like the first, first part, like when you're looking at your, with your clients and you're doing the bookkeeping, like, do you understand how to read their, their PNL. Do you understand what's happening in their business by looking at their financial statements? If you do, you understand financials a lot more than most people, and you're probably qualified to start advising on those.

So it might take a while to really feel comfortable with a CFO title, but start just like encouraging yourself. I think first, on what you actually do know, and the fact that you can speak to financials is like a huge part of it. So that's kind of my first my first thought there. Yeah, I love that. I, I completely agree with what you're saying.

The I think the idea there's two points I wanted to reiterate what you said. First, most there's a big difference between a CFO for a small business and a CFO for like Amazon. You said like like small businesses. There's there's a ton like millions literally of small businesses out there. And they need help. They need help, but they need help.

That's different than what Amazon CFO will provide that they just need different type of help. But they they still need help in the title CFO advisory. We you know, I agree, we don't need to necessarily get hung up on on the title, but it is different than bookkeeping. And it's, you know, bookkeeping is recording the pass, whereas the CFO advisor is helping them have a better future.

And so and the second point I wanted to highlight that you said is that you, you know, more most people that are in the accounting world know more than they think they do, because most people on earth don't understand numbers or financials. They just don't. Yeah. Go ahead, go ahead. Yeah. Well, and I, I think that there is an important aspect of, of continually to learn like I think that if all you've ever known as bookkeeping, you do still have a lot to learn.

So like, you know how to how to really advise a client how to project financials forward and not just focus on the past. So I think there is a certain level of like, you know, equip yourself with some upskilling like you, you might not know everything you need to know to be moving into a CFO role, but can you learn it?

Are you a learner then? Yeah, you probably can move into that CFO. You know, space, some people aren't comfortable with it, and I want to be totally honest with that. I've met bookkeepers that, you know, might have dabbled into advisory, and they just realize they're not actually comfortable. They feel more comfortable staying in historicals to tax CPAs.

And these are kind of the same way sometimes, like work, they can be like, I really feel comfortable in what's happened in the past, but when it talks about giving advice about the future, I feel like I can't substantiate it and I just don't want to do that. Like that's a personal choice. But I think if you're willing to learn and you want to, I think that you have the you have the foundational knowledge to be able to do that.

Totally. And also, I think the term imposter syndrome, people think that they have it. It's a bad thing, but I honestly think that it is a good thing if people have imposter syndrome in it. In other words, if somebody didn't have imposter syndrome, they they feel that they know everything about everything. And that's just not. And we all know that that's not possible.

There's like you said, there's always something to learn it. It's why they say that that first year medical students feel that they know more, they have less imposter syndrome essentially. Then then doctors that have been specialize in a particular field of medicine for decades. Those doctors that have specialized have a more imposter syndrome than first year medical students, because they know that they know that they don't know everything.

They know enough to know that they don't know everything. So it's it's it's a good thing. I mean, I definitely experienced posture syndrome when I started out, offering this, I mean, and I still to this day, to it to an extent experienced imposter syndrome. I think a lot of people that are high achieving experience it. I mean, did I guess what is your experience with imposter syndrome?

Yeah. I mean, I definitely still get to a place where I'm like, I don't know, am I qualified to do this? Am I? Yeah. You know, is but I but I have, I have kind of started to comfort myself more with saying, well, first of all, this company is actually seeking out my advice because they believe that I can bring this to them.

And, you know, yes, I have all the qualifications of, of being able to provide financial advice to clients. But I, I kind of have to sort of like, I don't know, kind of give myself some affirmations of like, actually, Hannah, like, you do know what you're doing and actually, like, this business is not really any different from the other 100 businesses you've helped before.

So maybe there's an extra zero on the end, but functionally, you know, it's all it's accounting still works the same way. And, you know, businesses struggle with the same things over and over and over again that you've helped other businesses through. So it's almost like a process of sort of affirming, like what I, you know, what you know, and you can kind of like, you know, comfort yourself in some ways and build confidence that way of just saying, hey, I know what I know, and I, I can I can perform.

So yeah, totally. And I think I liked what you said, that if a company's if a client is still paying you, they like something about what you're offering. And if you think about it, in many cases, if a business owner doesn't have somebody like you or somebody like us or me in their lives helping them with their financials or with or with helping them have a better business, who else are they going to turn to?

It's not like they're trying to decide between you and another CFO. It's usually not the case. It's like you or nothing or yeah, you know what I mean? And it's and it's like they they need help and they don't really know what help. But when they find somebody like you then and that they like what you're offering because there's not that many people in there and the average business owners lives that can really help them make numbers, make sense, and figure out what to do to have a better business.

I mean, there's just not that. Yeah. I mean, at the end of the day, what business owners really want is they want some answers and they want I mean, they don't want complex financial analysis, almost ever. Nobody's coming to a CFO and saying, build me the most complicated spreadsheet and impress me with numbers like nobody is saying that what they really want to know is just, you know, can I afford this decision that I'm about to make or what are the implications going to be next when I hire this person, what does that look like?

Can I even afford to hire this next person? You know, it's that they they want simple answers. So it's about just running some numbers on the back end so that we can support that for them and then help them talk through like what consequences might be. And it's, it's it's it doesn't have to be it doesn't have to be super complex.

Totally. Everybody listening. If you haven't already, sign up for our five minute weekly email with practical tips for accountants and bookkeepers to escape the accountants trap, go to the CFO project.com/newsletter. All right, so what's our next question? Timothy wants to know. I keep hearing that I need to offer advisory services. What does that mean exactly? Good question Timothy Hannah.

What everybody's. Yeah. Yeah. Because conversation is a vague term. Yeah. So what are your thoughts? Sure. Yeah. It's vague and, you know, really simple advisory. If you break it down, it just means you're providing some kind of advice. Yeah. And it's kind of to what we just talked about with clients want answers. And I'll just kind of tell you anecdotally what's happened with a lot of times what people come to us with when they find Clare CFO and they come to us oftentimes it's because they say, I went to my bookkeeper with questions and my bookkeeper wasn't able to answer them.

So it was a lot of those things like, you know, what's going to happen with cash flow in three months if I do X, Y, or Z, or do I have enough money to do this? They're usually not talking about their cash flow. They're usually just saying, do I have enough money? You know, they're trying to ask questions and they're not getting any kind of advice, or their CPA is unavailable because, as we know, a lot of CPA practices are overbooked and they don't really have time to actually talk to clients that are doing the work.

You know, I have questions about, should I do this or should I do that? And the CPA is not getting back to them or not being available for them. So we have kind of either sometimes the camp of the bookkeepers who are really not willing to advise on the financials, they're providing the financials, they're doing the books, but they're not really willing to say, what does any of this mean, or CPAs that maybe they have those skills, but they're just they're too busy and they don't have those times to really sit down with their clients.

So advisory really just means we have the numbers now. What do we do with them? And that can be as simple as an advisory call, where maybe you sit with your client at the end of a month and you sit down with them and you say, hey, like, what's happening in the business right now? What questions do you have?

This is what I'm seeing when I look at your financials, you know, it looks like you're spending a little bit too much on marketing. What's going on there? You investing right now you need to start having conversation about what's actually going on in the numbers and what the business owner wants to do, and then you can start to glean out, like, hey, we need to talk about this or that, or, you know what?

I know they can just start answering, you know, what are the questions that the business owner has? And then that can go all the way up to, you know, a more robust, proactive CFO service where you're doing budgeting and forecasting and you're having, operations discussions. You're working with other team members outside of just the, you know, the owner of the business.

And it can it can look quite, quite different. So I think there's a broad spectrum of services there. I totally I agree, I mean, I think that a, an advisor is somebody at the core that at the core just gives advice. Yeah. That's what they do. I mean, bookkeepers job is to keep the books. A tax professional's job is to process taxes.

Those are very transactional things that need to happen. That's not advisory, though. An advisor is somebody that can be a the bookkeeper here or can be the tax professional, or doesn't have to be like, I started, I started, because I used to be an accountant. Then I started my own business. I had nothing to do with accounting.

And then I started helping business owners in my space realize that I took for granted the fact that I understood numbers, and I started helping them, and that morphed into a CFO service. I don't even call it a CFO service to start with. It was just I was helping them. I was giving them advice and had nothing to do with their books or taxes.

So it could it could come about in any different way. But the at the core, I agree with you. You're giving advice on helping them have a better future, which is what the business owner wants. Yeah, like business owners are not lying awake at night thinking, oh, I can't wait till my books are closed this month or my taxes are done.

They're lying awake at night thinking, how can I make payroll next Friday? You know that, you know, will I be able to this business be able to continue under my leadership over the next five years? So I don't have to go back and get a a job that I desperately wanted to leave, you know, from those are the things that they really want help with.

And so we had the opportunity to help these people because most business owners fail. I mean, according to the US Bureau of Labor Statistics, eight out of ten will be gone above 80%. Eight out of ten will be gone by their 10th birthday. That's nuts. All that time and energy and money that business owner put into their business is just gone.

And we had the opportunity to help. And I think it's a real I think it's a it's a service that that accountant, accountants and bookkeepers can provide. And it's a service that business owners desperately want. Yeah, they do really want it. I think that's what they're kind of hoping for, honestly. Usually when they hire any kind of financial professional, they're typically hoping they're going to get that.

I've been trying to educate people, to say, hey, you know, first of all, you get what you pay for. So if you're trying to get the cheapest bookkeeping service, you're probably not going to be getting any kind of advisory service as well. But you know, also that sometimes the person that's really well equipped to, do bookkeeping is really happy to do that may not be the person that is is advising unless they've stepped into that role, you know, because there is there are a large group of people that would say, no, I don't want to give advice.

I just want to do the compliance work. And, you know, you you need to understand if you're willing to step into that space. I think the other piece about being an advisor and providing advisory, it is it does kind of, it allows you to really step into a place of trust with a client if you're doing it.

Well, and that creates this stickiness factor because if you've really, you, oftentimes like, there's some things that my clients have told me that they've told nobody else in the world because they can't tell their other employees. Maybe they can't even tell their spouse if there's, like, trouble at home or something like that. You know, there's there's, you know, maybe very few people, maybe a business coach or mentor or something like that might also have heard these things.

But, you know, when you really step into really trying to understand the business and the business owner, it is a you form a bond and it is there's there's a trust factor that happens there. And from a business perspective that's helpful because you build long term relationships which can, you know, forge, you know, very good things for your business.

You have that lifetime value of a client because you're doing that. But even just from a satisfaction level, which I find so rewarding in the work that we do, is I get off a call with a client like that and I'm like, wow, I really was able to really, truly help them and also give them some kind of relief because they weren't able to have that conversation with anybody else.

So, you know, overall, the satisfaction level, I think, goes up when you really can step into that advisor role. And then also from business, I mean, it's more valued on the client side. I usually get paid more for that work and then they stay on for longer typically too. So yeah, it's a win win in that space I agree I love it.

Hey there Adam Levine with the CFO project podcast. Are you an employee, accountant or bookkeeper that would like to start an advisory service on the side? Well, we have a free training for you called Side Hustle CFO, where we'll show you how to start a business on the side, offering CFO and advisory services to small business owners. We conduct this training every Friday at 3 p.m. eastern and 12:00 pm Pacific.

Go to the CFO project.com and click on free trainings to register. All right. What's our next question? Samantha wants to know. I'm transitioning to CFO services. Should I still offer tax prep services? Oh, that's a good question. What are your thoughts? Yeah, I think this is going to be different for everybody. I think the my first my first thought for I guess Samantha is, you know, do you want to be offering tax prep services as is the first thing.

But, you know, I don't think there's anything wrong with having a firm that offers a full suite of services, because I do think there's a lot of clients that come and we've lost potential clients. When a business wants everything and under one roof. So they want to have their bookkeeping, their tax and their CFO services with one provider, you know, company, it's probably not going to be one individual.

But, you know, one company. And that's, you know, we're like, hey, that's fine. We actually don't provide any kind of tax services and we're not really providing bookkeeping services. So we we work with those providers, but we just don't do it. So I think for Samantha, I would I would say, you know, what is I guess like decide what is more important for you.

Is it like, what do you want to lead with? Do you want to lead with tax prep services and try to upsell into CFO services? Or do you want to try to lead with CFO services and then kind of add on and say, oh, and we could also do your tax return for you, or we could also do something else.

I found much more success trying to lead with CFO services, rather than trying to upsell from a lower priced, service, you know, something like tax compliance and bookkeeping. You know, they typically are lower dollar amount. But then to like come in and say, oh, and I want to try this, I'm going to try to sell this package that maybe 4 or 5 or ten times the cost of what, you know, bookkeeping services might be or it, it can kind of jar a client to some extent.

But if you come in with CFO services and then you provide the ancillary, other things, I find, then it's a little bit of an easier sales process. But yeah, I agree it's a little different. Yeah. And you could I completely agree with you. And you, you don't have to be the one like Samantha. You don't have to be the one doing the tax prep.

You can have someone on your team doing the tax. Yeah. You can outsource it. There's a term I heard a couple of weeks ago called CFO confirming and actually confirming which for me, which is essentially where you work with another firm. So so CFO firm could work with a tax firm and they could share a client. And, which I guess is a fancy way of white labeling your service essentially where you're charging the client, but then you pay a third party provider or you can outsource it.

So I agree. So, Hannah, it's a you don't offer tax or bookkeeping, you just offer CFO in your firm. Okay. Yeah. I mean, we've we've dabbled with bookkeeping, but we've actually, we're we're we've decided that it's probably not a strategic direction. We want to go in the in the long run, I think we've, we've, we've battled back and forth with it because we have this concept of, well, garbage in, garbage out.

If we can't control the data coming in and like, make sure that those bookkeepers are doing a really good job. It means that the CFO is spending time like trying to clean up the books, which is inefficient and not good. So what we're looking for is like, okay, how do we how do we ensure quality of the financials first before we move in to CFO services?

And then how do we advise that client if the quality is poor? We were thinking, well, we should just take it on ourselves, hire out bookkeeping, build up the bookkeeping side. But none of us really want to do that. Like build out the processes for bookkeeping. And so we're we're looking for solutions right now and that it's a current conversation between me and Michael.

Yes. There's a lot of client. There's a lot of clients books that have a lot to be desired in terms of quality. Yeah. And you can't I mean, you can't advise on really poor financials. I think that is I mean, if you get a bad set of books, you're you're not going to be able to provide a lot of information.

And if you just rely on them without ensuring quality, then you could be really I mean, we've we've had books come where, you know, huge loans are not on the books or, you know, drawers are being recorded as expenses. I mean, like things all over the place where you're like, wow, I would never have advised that had I known this huge piece of information that's actually missing.

So, you know, we've started to build that into our sales process to where, like the beginning part of our our engagement together, it does have a quality assurance piece to it. So we can make sure that that is good before moving in to retain our CFO services. So if we need so we're looking for our partners that are going to do like big clean ups for us.

And then, what those ongoing services, you know, bookkeeping services, finding really great partners for that. So I don't think you have to do it all. You don't you certainly don't have to. But if you have a firm that's already really established and you've got great processes and people in place and you're starting to layer on advisory services, I mean, then you can be that one stop shop for people, which I think a lot of customers can really appreciate if they feel like everything's being taken care of.

That one source of who they want to go to could be really great. But yeah, I you're what you could get paid as an advisor versus a tax compliance person. If you're a one person shop, then you might decide that it doesn't make sense for you to do tax compliance. Maybe you just build a partnership with somebody that you can send all of your tax referrals to.

Yeah, totally. Well, I Hannah, this has been a fantastic conversation. I love the three questions, from Maggie, Timothy and Samantha. So, Hannah, I know that you put together a lot of YouTube videos and resources for for people that want to offer or offering CFO services. Tell us about that. Yeah. So, my I have a YouTube channel called Claire CFO Group.

So it's a Claire CFO Group channel. And we have over 300 videos on there. It's really meant for small business owners, but we have a lot of accountants that watch the channel. And we we've we haven't figured out exactly what percentage, but I'm thinking it's about at least 20 to 25% of our channel viewers are accountants watching.

But we have a lot of things like how to build a budget, how to work on cash flow forecasting. And we have cash flow forecasting templates that a lot of accountants have downloaded and used with their clients. And then I also have done like a series of financial analysis on real businesses. So businesses have given us their financials.

We've made them anonymous so nobody knows what business it is. And I actually walk through like how how I would think about a the PNL and the balance sheet. And I just kind of talk through observations. So if somebody is really thinking about, okay, what does this look like? If I were to do a financial review with my client, what would that look like?

I think those are really good potential resources for people just to, you know, probably the things that are coming into your head are the things that actually the clients want to know. So watching those videos, I think, you know, you'll realize, like how simple some of this stuff really is and you actually know it, maybe more than you think you do.

So those might be really helpful for anybody who's trying to figure out, like, can I, can I potentially do this for clients? Take a look at those financial review videos. Awesome. Thank you so much, Hannah. Thanks for coming on the show. Thanks for having me. It was super fun. So if you haven't already, sign up for our five minute weekly email with practical tips just for accountants and bookkeepers to escape the accountants trap, go to the CFO project.com/newsletter.

See you next time on the CFO project podcast.