What is CFO-level advisory for a small business?

What the phrase is pointing at

In a large company there is somebody whose whole job is to look at the financial position and say what it means for what the business should do next. Not to record it, and not to file it — to read it and to argue with it.

A small business has exactly the same questions and cannot carry that job. What it can have is the reading. That is what the phrase is describing: a layer of attention above the bookkeeping and the return, applied to the same numbers, asked a different set of questions.

It is worth being plain about what that is not. It is not a person holding a title in your business. It is not a promise about an outcome. It is a habit of looking at the numbers before the decision rather than after it.

What it looks like month to month

Cash, ahead of time

Where the cash position is heading over the coming weeks and months, given what is owed to you, what you owe and what is already committed. Most owners meet a cash problem on the day it arrives.

Margin by line of work

A business can be comfortably profitable overall while a whole category of work loses money quietly. The annual total hides that. Looking at it by service, product or job is what surfaces it.

The hiring question

What the person actually costs all in, what the business has to do to carry it, and what happens to cash in the months before the hire starts paying for itself.

Debt, and what it really costs

Not only the rate. What it obliges you to, what it does to the cash pattern, and what happens if the year underperforms the plan you borrowed against.

The lender question

Lenders want current, credible financial statements. Getting the numbers in order before the application goes in is usually where these stall.

The question nobody asked

The value of somebody reading the same statements every month is that they notice the thing that changed before you have a reason to look for it.

Profit and cash are not the same thing

This is the single most common way a healthy small business gets into trouble, and it catches careful people.

Profit is a measure of the year: what was earned against what it cost to earn. Cash is a measure of the week: what is actually in the account when something has to be paid. A business that grows quickly can be more profitable and less solvent at the same time, because growth is funded before it is paid for — stock bought, people hired, work delivered and invoiced to clients who pay in sixty days.

Watching only the profit and loss will not warn you about that. Watching cash will.

A business can be profitable on paper and still not make payroll.

Who it is actually worth it for

Businesses that have moved past the beginning and are having to decide things: whether to hire, whether to borrow, whether to open a second thing, whether the growth in front of them is worth what it will cost to service.

Also owners who feel as though the finances happen to them. Who find out how the quarter went at the end of it. That feeling is almost always a reporting problem before it is a business problem, and it is usually fixable in a month or two.

And not everybody. If the business is steady, the books are clean and no decision is pending, this layer is not earning anything and you should be told so.

Where it sits

Inside the accounting relationship rather than beside it, because the person reading the statements is the person who produced them and can say how much weight they will take.

That is the practical argument for keeping the two together. An advisor reading a file they did not produce has to trust it. One who closed the month knows exactly which parts of it are solid and which are estimates.

What to settle before you start

Three things, and they are reasonable to want settled before anyone opens a file.

What the first conversation covers, and at what point work starts being billed — ask for the boundary as well as the headline. How the work is charged, and whether the answer changes depending on what you end up doing. And who will actually do it: a name, not a department.

The office answers all three directly on (401) 405-8407. Anyone worth hiring answers them without hedging.