In this episode of the CFO project podcast, we answer your questions around why you should become a CFO advisor.

Welcome to the CFO project podcast. Today, we're talking all about why you should become a CFO advisor. To help me with the discussion, I've invited a fellow CFO and a fellow CFO project member, Kelly. Good to the show. Kelly, welcome. Thank you. It's great to be here. Adam, I appreciate that. The invite. Yeah. So I'm excited to talk to you guys.

I'm always excited to talk to the CFO project members. You know, obviously you joined because you wanted to become a CFO. So I want to understand sort of why that is. So before we get into all that, tell us a little bit about yourself. Well, I have been in accounting and finance roles public, private over the last almost 20 years now.

And over the last few I've been realizing that I wanted a little bit more and I wanted more control over my own schedule and the actual work I did, and just realized that I wanted to work for myself and didn't quite know what that would look like. But, you know, started off with working in bookkeeping way back when somebody would hand me a green ledger sheet.

So I got my practice in that way and then moved on up. And, you know, various roles of senior accountants, controller, assisting controller. And it just got to the point where I realized I wanted to do a little bit more and feel like I was having more of an impact on the business and helping business owners. Yeah.

Okay. So, so essentially you had accounting full time accounting jobs. Yeah. Did you branch off first to do accounting or did you branch off on your own just to do advisory? I Brant I so I left the corporate world in October of last year knowing what it was going to be. And okay, to start with bookkeeping because that's a simple basic service that, you know, most businesses are going to require.

So I didn't know what that would look like. But I knew and I knew I wanted something else. Got it. Okay. And did you actually do did you actually get bookkeeping clients? You did. And then what? At what point did you think, all right, I need to add advisory services to this. It was almost immediate because as much as that bookkeeping is crucial, I just I don't want to keep doing it.

So yeah, I, I understand I, I understand what you're what you're saying. At least I think I understand. I've never actually done bookkeeping. I was an accountant for several years and I the part that I didn't really like about accounting necessarily was that all I was doing was recording the past. I mean, that's it. Whether the business, the business succeeded or not, they nobody really cared in the accounting department.

And it was just weird. It was just, just like, don't you think we should suggest things? And they said, no, what are you talking about? And I it just wasn't for me. I wanted to help the business grow. Yeah. And that's that's what motivated me. Yes, completely. I mean, one of the clients that I did start with bookkeeping.

They're a very young company, very young owners. And again, they need the bookkeeping. But that's not going to get them the growth they need. And knowing my background and I've had that analytical experience and I've had all that work and practice, I'm like, I would rather use that than spend my time doing bookkeeping. Yeah. No, I, I completely agree.

So when you thought, when you thought about the idea of offering these advisory services, what was the the big motivator behind it? I mean, because you could continue to build out a, you know, bookkeeping or accounting firm. But what was the motivation behind becoming a CFO advisor? Primarily seeing a lot of small businesses struggle because their owners are the experts at the company and their product, their service.

But they don't know exactly what to do. Their numbers are just they're almost imaginary. They're they're coming in and out of the bank or they're hitting a, you know, bookkeeping system, but they have no idea what to do with them. Whereas, you know, I worked for a lot of larger corporations or I guess, probably realistically in the grand scheme of business, they were medium to small.

But yeah, they had tons of support, tons of advisors. And yet here is the backbone of our country is, you know, 99% businesses and they don't know what to do, and they don't necessarily have that support because they can't afford a full time CFO. They can't afford an in-house person that can say, yes, this is what I'm seeing.

Here's what we need to talk about. Yeah. Oh, I agree 100%. I mean, business owners, we everybody listening. We have to remember that business owners, they didn't get into business because they are just magically skilled at businesses. They didn't graduate from Harvard MBA and said, oh, let me open up a, you know, a, a, a small business today.

No, these are people that are experts at their craft. So like a construction company, construction company owner has experience in the construction industry. A dentist starts a dental practice. Somebody that that's involved in restaurant management, like a chef opens a restaurant. So these are people that are great at the craft of the business. But as we all know, we can be great at the craft of the business, but not necessarily great at running a profitable and high cash flowing business.

Which cash flow is the only thing required to stay in business. So these people need somebody like us. And yeah, I like how you said that, Kelly. I mean, it's business owners need help. This is the backbone of of this country is the backbone of every country. Small business ownership. It employs the most people. Yeah. I mean, like you said, 99% of all businesses are considered small and they don't have somebody that sort of a person that looks at the, the holistic, the, the whole of the business, not just through the lens of financials.

They need somebody that looks at the whole business. 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. So let me ask you, Kelly, after becoming a CFO advisor, what has been the biggest surprise that you didn't really think about or didn't really get until after you became a CFO advisor?

I think it ties back to the small business owners that they're just out here every day and go into their company, and they really just don't know. They really, truly how much they truly need support. I mean, it's mind blowing. Some of the clients I've gotten over the last couple months that not only do they either don't have bookkeeping or they've been doing their bookkeeping cash basis, or they've been throwing some numbers together for the tax accountant, but not understanding what impact that could have if they had a true, clear picture of their numbers.

And no idea that it's, you know, even more of a benefit to have a handle on that rather than just taxes. I think that's the one thing that is surprising is how many people think bookkeeping and numbers are for taxes only. Right. And they're out here. Yeah. I give all that to my tax accountant. They handle it and I don't really know why I don't have that cash in the bank.

I did, you know, 3 million last year. I don't know where it's at. And I'm like there's that's and that's again ties to that support. They are not the accountants. They're not the advisors. They're running their business out selling their own services. Right. Yeah. I agree, and I think a lot of accountants do a disservice to their clients because and I don't think accountants do this.

And I'm confident that counties don't do this on purpose. But accountants understand the financials. So well that is baffling to think that somebody else doesn't understand it. You know what I mean? Exactly. And it's like the the business owners clearly struggling and the accountants as well. Here's your tax return. Or the bookkeeper says, oh, here's your balance sheet, you know, and and they send it to the client as if the client's lost a magical know how to read them and how to interpret them.

Yes. Have you found that the amount of people I've also sat there have said, well, I get this huge, complicated report, but I don't know what I'm supposed to do with it. So it comes back to you. We know what we're doing, and that accounting makes sense to us, but it's not getting translated in a way that the business owners can actually use that data.

That's that's definitely crucial. Yeah. I mean, the balance sheet, if you think about it, the the balance sheet and the PNL are our accounting reports. They're not managerial reports. It's hard for the average non-financial person to understand what to do just by looking at those reports, because if you think about it, you could look at the piano and you could have a really high revenue and you could even have really high profit.

But there's no cash in the bank. And the business owners confuse, like you said, they're like, I had $3 million. Where did it go? Yeah, the business owners confused. And then you look at the balance sheet and it's like, what does this mean? I don't understand why, you know, retained earnings is such a high number that it is such a high number.

But then they're not looking at other things on the balance sheet to tie it with the PNL, because it's it's an accounting report, but it's, it's of no use when it comes to your management operations. I mean, critical to make sure your books are correct. Sure. That doesn't help in a way that is future looking either. It's all historical based, so you have to have somebody that can help you take that and turn it and flip it the other direction.

Yeah, absolutely. I mean, business owners want somebody that that understands the numbers because they they are confused about it and they're insecure in their ability to understand the numbers. They know that. That's why we as accountants and bookkeepers and CPAs are such the best type a group of people to offer advisory services. Because at the end of the day, the only thing that matters is cash flow.

Yeah, yeah, having cash flow, not revenue. Not profit. I mean, those are reported obviously, but cash flow is the most important one. We understand that. So we need to be able to use that that expertise, that super power and and provide a service that actually helps the client. And that's where advisory services come in 1,000%. It's. Yes. Well, so Kelly, what skills do you think most accountants or bookkeepers lack that they need to get in order to become an effective advisor?

I think the most critical is it just that conversation we just had is that the bookkeeping? Stop having the bookkeeping conversation. Stop having the accountant means it has to be directed towards operations in the future, and the business owners goals, because they don't care what the bookkeeping is. You know, I think I've on on some of the other meetings we've had, it's we are more concerned with making sure the books are right than they are, because when it doesn't matter, it's going to happen how it happens, it's going to land, whatever.

So we have to stop having the accounting conversation. It has to be about goals in the future. That's the critical piece. And it's it's the critical piece. I, I completely agree. I think it's a critical piece for a couple reasons. One, your clients or future clients care way more about having a better future than they want to make sure that the past is recorded correctly, that your bookkeepers and accountants, they care about that because accountants are doing the taxes.

It has to be done, right? Yes, but but the bookkeeping, I mean, the average business owner, they they I think they appreciate that it's done right, but they don't really appreciate it as much as most accountants think they should. I mean, they just let's face the facts, they just don't. They just want it done. They and I honestly, I'm convinced that most people on earth who are not numbers people, by the way, most people on Earth are not numbers people, or especially accountants or bookkeepers.

They know that taxes are a necessary evil, but I don't think they really understand that there's a difference between a good accountant and a bad one. Correct? They just go to the accountant that they resonate more with. They like, or was referred by their uncle or brother neighbor like, you know, most people can't determine the difference. And so most accounting is treated as a commodity.

Yes. In the eyes of a business owner, it's just something that has to be done. Like if somebody owns a restaurant and their, their, their freezer goes out and the restaurant, they want a plumber who can or whoever fixes freezers can to fix the freezer, they're not going to sit there and like understand how to determine which which mechanic is going to be the best one to fix.

This is what it fixed because they got a business to run. Yes. They don't really care how it gets there. And that's the same thing. But with with accounting, the the super power like we talked about is being able to help the business grow. So if you can if it if you could say, look I will do your taxes no problem.

But what I really or I could do your books no problem. But what I'm really interested in is helping you have a better future. Helping you have a business at last that can take on more and more money for you. Pay off your debt. You can have healthier business. You can expand. That is what resonates with business owners.

Absolutely. Hey there at Olin with the CFO project Podcast. Are you an employed 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. We will 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 3:00 pm eastern and 12:00 pm Pacific. Go to the CFO project.com and click on Free trainings to register. When you started taking on advisory clients, I'm curious what has been the sort of that the things that you're the moment that your client experienced after you became their advisor? What are the things that they thought about differently?

The I would say the the different roles of different accounting professionals can play that. You know, I have a client that has two locations, and for years she's been using the same bookkeeping firm and tax firm. Last year, she decided to buy a building, and next thing you know, she's out of cash and no one ever said anything to her because they weren't concerned with that.

Their concern with recording historical data and making sure her tax return was done. So when she and I had our initial talk and we met and I said, well, you know, yes, you would hope that as a professional they could give you a little bit of a heads up, hey, by the way. But I said, that's also not necessarily what they expect is their role.

So understanding that we all play different roles within that accounting world and how we can actually help you. And I think when she and I had that talk, she realized she had been relying on them for advisory. They were not advisors. And that was that. Yeah. That light bulb. Yeah. That is a very interesting point. I mean, I think a lot of I think I do think a lot of business owners rely on their, the, the experts in their lives to, to provide things that the expert is unaware that they're expected to provide.

Right? I mean, let's face it, like if, you know, if if I go to the mechanic, the car mechanic to get my car done, I sort of expect them to say, well, if you know, this thing has to be fixed or your car's going to die, and next month, within the next couple months, I would expect them to say, but if they never said anything and my car died a week later, I would go to the mechanic, say, look, I was just with you.

You know, I brought my car in last week. What happened was I well, you know, I fixed the problem. You said it needed to be fixed. What do you what else do you want? And it's like, it's it's it's crazy to think about. But business owners, the one thing in their lives that they need to work is their business.

So they want their financial professional in their life to give them advice. Yes. Has to. Yes. And the biggest thing that surprised me after I started taking on CFO advisory clients many years ago was that price almost went out the window. In other words, they price shopped everything. But whatever fee I put in front of them. My proposal for CFO advisory Services, they said yes to it because it they they all of a sudden their view of me shifted from something that's an expense to something that they really want that can help them have a better business.

Yes. And that was the most shocking part to me is like they they want they didn't just want this. They needed it. They craved it, I would say. And so far, again, it's been a very short time for me. So really just a 2024. But you can quickly also discern which potential clients are actually on board with that too.

It's almost immediately clear who's you know, it's whoever starts asking you about pricing first. They're just looking at it as, again, a service, a commodity, but somebody that I need help and they are actually listening to what you're saying and you're having an actual valuable conversation. You're that's how that pricing conversation then plays out later. Because they're not they're in there ready to go.

They want that help. I agree 100%. I remember meeting with this guy who who's a second generation pest control business owner. His dad started his pest control business. He took it over several years earlier, and I was presenting him at the essentially the proposal for my CFO advisory services. Halfway through, he stopped me. He said, you know what?

You don't have to say any anymore. I want this. What's the price? Like, I could have doubled my price and he would have said, yes, yes, but I just gave him the price. I was prepared to to give him an he said, done, let's do it. I mean, it was just they need this. Yes. Oh yes. Definitely. Well, Kelly, last question.

What advice do you have for those accountants or bookkeepers listening that are thinking about becoming an advisor? What advice would you have for them? Find the framework that fits with who they are as a, as a professional. So some people want to go off and do and create their own, and that's great. I knew that I didn't want to spend time trying to recreate a system, but I knew that there were other experts out there.

So I think part of that is a long way to say, find the experts to help you on your own journey. So whether that's the CFO, project it for me, it was also marketing and social media and website management because that's not my skill set. I don't want to spend time on that. So I hired an expert just like I joined the CFO project.

This was the expertise that I needed to get me on my way. So I think that, remember, you know, all of us remembering, we all need that help along the way. Totally. I mean, it's it's why, you know, we just the Olympics just ended when this is recorded. I mean, every single athlete has a coach, has a, has a mentor, has an expert that knows what they're talking about because the Olympic the athlete wants to be a champion, I mean, everybody I mean, when I try to do something new, I always get somebody who knows it more.

And I mean, it's a fast track, way faster, way to be successful. Kelly, thank you so much for coming on the show today. Thank you for having me. It's been fantastic. And to everybody listening, 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 and start offering advisory services, go to the CFO project Comm forward slash newsletter.

See you next time on the CFO project podcast.