I was discussing what it is that I do for people and the conversation turned to an actual situation that my friend knows of. It occurred to me that it might be helpful if I shared real life examples so that people will understand that they are not alone. The challenges of running a business are more common than we think. The example below is not as unique as we might think.
A very successful businessman (we will call him Roger) sells his business, moves to another state and begins a brand new successful business. Roger keeps some of his most trusted employees but he chooses an accountant in his new state to handle most of the bookkeeping, including writing checks and reconciling the bank accounts. The new business is growing rapidly and Roger’s trusted employees have doubts about some of the accounting. At first Roger doesn’t know what to think. The new accountant is a CPA familiar with local law. And while his trusted employees complain that the accountant treats them poorly, the accountant falls over backwards for the owner. Recently though the owner was questioning the financial reports provided by the accountant. It appears that too much expense is being dumped into one expense account, a “slush fund” so to speak. The accounting lacks the accuracy needed in order for Roger to make informed decisions as his business expands.And so on. As I listened to the description I lost count of the red flags that popped up.
Roger’s situation is not that uncommon. To put it simply, it is hard to know if the trusted employees are afraid of change or if they can see a problem that Roger can’t see. Who should he listen to, the professional CPA or his trusted employees? As a part time CFO I could provide Roger with the insight that only someone from the outside can provide. I would start with a clean slate, carefully and objectively reviewing the accounting system. I would determine what information Roger needs from his accounting system and help the accountant fix errors and allocate expenses properly. And since Roger is in the process of growing a new business I can be there to help him with the strategic decisions. Very importantly Roger needs to be able to trust his accountant. In this specific case I would likely be in the position to provide comfort to Roger about his accountant, who he is losing faith in, or provide confirmation that continuing to retain the accountant may not be in Roger’s best interest.
I have not yet approached Roger about becoming his part time CFO but I am absolutely certain that Roger will greatly benefit by such an arrangement.