Why a Fractional CFO?

What makes a CFO different from an Accountant or a CPA?

While Accountants and CPAs are incredibly important to business, they do not contribute the same resources that a Fractional CFO can.

Chief Financial Officer (CFO)

Comprehensive margin analysis
Effective financial analysis and KPIs
Credible forecasting
Meaningful one-year financial planning
Prudent long-term financial planning
Practical scenario analyses
Influencing lender and/or investor financing
Contributing to pricing strategies
Designing performance-based compensation
Supporting staffing decisions
Providing input to contract negotiations
Recommending practical internal controls
Assess/recommend accounting systems
Enhance employee benefit cost management
Mentor/coach Controllers
Drive business value
Impact preparing for and executing transition
Ensure financial information is meaningful

Controller (Accountants)

Prepare standard financial statements
May/may not know GAAP requirements
Perform monthly accounting close process
Perform bank reconciliations
Perform payroll processing
Perform Accounts Payable processes
Perform Accounts Receivable processes
Perform other account reconciliations
Perform sales tax reporting
Support independent CPA requests
Prepare borrowing base schedules
Perform simple forecasts
Support basic accounting system matters
Might recommend basic internal controls

Independent CPA

Prepare tax filings
Recommend tax strategies
Perform Compilations (if required)
Perform Audit/Review report (if required)
Provide limited strategic financial advice

Real Life Case Studies

Construction equipment rental debt structure

“I proposed a refinance debt structure for a client that rents construction equipment. The bank approved the proposal resulting in reducing debt payments about 50 percent which resulted in doubling debt capacity to support growth.”

Rescue business sale

“I replaced a peer subsidiary CFO handling a sale of a subsidiary. All four due diligence finalists threatened to walk away. I provided more meaningful financial information and explanations. Three of four completed due diligence and submitted final bids. The subsidiary sold for 101% of the target asking value.”

Business sale with earnout

“A client was frustrated that a buyer bid was below his minimum acceptable amount. The buyer finance team was a Big Four CPA firm M&A transaction team who insisted their value model was merited and the acquisition lender would not support a higher price. I proposed a one year earn-out structure for the 10 percent in which my client was 99 percent confident exceeding the amount and the Buyer CEO agreed to the adjustment which did not impact the lender cash at closing amount approved.”

Buy-sell price negotiation with working capital

“A client was frustrated by a buyer offer and proposed working capital amount. The Fortune 500 international buyer insisted its value calculation and net working capital analysis were merited. I was allowed to discuss both with the buyer Finance team. The buyer increased its offer 20 percent and reduced its working capital requirement resulting in an overall 25 percent value gain to my client.”

Distributor margin analysis

“A client was proud of producing and reviewing a detailed product margin report monthly. I attained a data export and performed a margin analysis. I discovered margins for 20 percent of sales for low volume products were priced at lower margins than high volume price sensitive products. The company promptly increased prices 10 percent on products representing 20 percent of sales resulting 2 percent higher margins and 25 percent increase in company bottom line profits.”

M&A advisor rejected client

“An M&A advisor recommended me to a business after refusing to represent the company based on the financial information provided. The business owner was a former Big Four CPA firm audit manager. After expressing frustration that the M&A advisor failed to understand underlying value, he reluctantly agreed to accept my help. I discovered how to reasonably report a business segment with value separate from the business segment without value that was clouding the whole company. The M&A advisor agreed to take the segment with value to market and attained an offer within 30 days.”

Sales growth without profit growth

“A landscape service client expressed frustration at recovering/growing sales without growing profits. I discovered financials did not clearly show cost of sales separate from operating expenses. The client did not know how actual margins compared to job estimates bid. I discovered actual field labor exceeded estimates by 70 percent. I discovered benchmark margins were 45 percent and the client was bidding 35 percent margins. The client raised job margins bid and implemented controls to report and monitor actual job performance versus bid estimates.”

WIP analysis

“I performed comprehensive WIP analysis for a construction trade contractor. I discovered all jobs actual and bid estimates omitted about 6% of indirect job costs. The client promptly updated estimating which updated job bidding and improved job margins. I also demonstrated clearly high dollar low margin jobs to ensure job performance was effectively reviewed by leadership. Further, I clearly demonstrated profit adjustments due to changing margin estimates separate from profit trends due to progress completion.”

Overcoming buy-sell contract obstacles

“I assisted a client in acquiring the shares of the majority owner. The SBA presented one obstacle. The client attorney proposed a solution rejected by the SBA. I proposed a solution accepted the SBA. The lender presented an obstacle. The client attorney proposed a solution rejected by the bank. I proposed a solution accepted by the bank. The seller attorney presented an obstacle. The client attorney proposed a solution rejected by the seller attorney. I proposed a solution accepted by the seller attorney. The deal closed.”

Performance based comp

“A service business client decided to implement performance based compensation for a key employee service team. I already assisted the client in establishing key metric targets for the business in conjunction with the next year financial plan. I reviewed the client proposed plan. I discovered the client used prior year metrics to determine performance pay formulas. The client corrected the formulas saving 6 percent of sales and avoiding a 33 percent profit reduction.”

WIP analysis with dummy jobs

“I performed WIP analysis for a construction trade contractor. I discovered about 10 percent of indirect costs were miscoded and omitted from job cost reporting which impacted estimating and bidding. I also discovered 3 percent of job costs were being coded to dummy jobs. As a result, estimating and bidding omitted 13 percent of job costs. Estimating and bidding were promptly updated. Accounting improvements were implemented.”

Renegotiating Loan for Improved Cash Flow

“A business with poor cash flow faced unsustainable loan terms. I proposed a storytelling approach to present a high-level plan to the lender, highlighting how restructuring the loan would ensure the business’s survival and future growth. This approach led to extended repayment terms and reduced interest rates, improving the business’s cash flow and stability.”

Margin Analysis and Pricing Strategy for Profitability

“A client struggling with profitability lacked insight into product and customer margins. I conducted a thorough analysis, identifying low-margin products and customers that diluted overall performance. By increasing prices on targeted products and improving cost controls, the client achieved a 3% margin increase, driving a 20% boost in net profits.”

Reducing AR Payment Terms to Improve Cash Flow

“A business experiencing cash flow shortages had overly extended accounts receivable terms. I reviewed payment practices and introduced shorter AR terms without risking customer relationships. By implementing these changes incrementally, the client improved cash flow by 15% within six months, ensuring greater liquidity for operations.”

Improving Business Performance Through KPIs

“A client needed to enhance overall business performance but lacked visibility into key metrics. I developed a set of tailored Key Performance Indicators (KPIs) aligned with their strategic objectives. The client gained actionable insights into performance drivers by implementing a system for frequent monitoring and review. This initiative fostered team accountability, improving operational efficiency and measurable progress toward business goals.”

Defining a Three-Year Strategy and Establishing a Budget

“A client struggled with long-term planning and had never set a formal budget. I facilitated strategy workshops to define a clear three-year roadmap, focusing on growth and profitability. The workshops identified key priorities, actionable tasks, and measurable outcomes. For the first time, the client established a comprehensive budget, integrating strategic initiatives with financial planning. This process provided clarity and direction, setting the foundation for sustained growth and improved profitability.”

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