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What is a Forbearance Agreement? [& How It Works]
Turnaround & Restructuring

What is a Forbearance Agreement? [& How It Works]

December 9, 2021
5
min read

Happy holidays! December is a month of giving. Families exchange gifts, neighbors and friends give time and service to others, and many donate money to charitable causes. It’s a great time of year!

Another gift will be given to thousands of commercial borrowers by their lenders this year: a gift of forbearance.

What is a Forbearance Agreement?

A forbearance agreement is an agreement made between a lender and a delinquent borrower. In this agreement, a lender agrees not to exercise its legal right to pursue default remedies, and the borrower agrees to a plan to help bring the loan current.

The Covid-19 pandemic has had a profound effect on commercial borrowers and lenders over the past 18 months. While foreclosure moratoria, government stimulus, and eased banking regulations have relaxed pressure on struggling borrowers, these programs will soon expire. More and more lenders and borrowers will need to look at traditional ways to resolve troubled debts.

When a borrower defaults on a loan, the lender has the right to pursue its remedies under the loan agreements. It’s typical for these remedies to include accelerating the loan, making a demand for immediate payment in full, foreclosing on its collateral, moving a court to appoint a receiver, and/or various other actions.

With a forbearance agreement, the lender agrees to temporarily pause taking action to pursue its remedies. This pause usually gives the borrower time to put together a plan to recover and to take other actions the lender requires. Although lenders almost always say their terms of forbearance are standard and non-negotiable, for commercial borrowers that’s rarely true. Forbearance agreements are usually hand-drafted for each situation. It’s a delicate negotiated process.

How does a Forbearance Agreement Work?

In distressed situations, borrowers almost always break the lender’s cardinal rules by asking for:

  • more time;
  • more money; and/or
  • the lender to assume more risk

A forbearance agreement memorializes the terms a lender might be willing to give such. However, borrowers should not expect these requests to come without a price. It is common for a lender to require the borrower to pledge additional collateral, sign personal guarantees, agree to a higher rate of interest, provide additional reports, waive claims, hire professional advisors like a Chief Restructuring Officer (“CRO”), and/or stipulate to swift remedies in the event of default. A big price, for sure, but agreeing to these terms just might save the business.

Commercial borrowers should never negotiate a forbearance agreement without the help of qualified counsel and in some cases a turnaround professional. These professionals help borrowers avoid pitfalls, negotiate terms that are in the borrower’s best interests, and add credibility to the borrower’s requests. Lenders welcome these professionals.

Further, it is important the borrower negotiates the terms carefully because it is likely to be the only chance it will get. Rarely does a borrower get a second or third chance. The future of the borrower’s business largely depends on the terms of forbearance it negotiates.

If you or your client is in default with a lender, call Ampleo for help. Its team of turnaround professionals have helped dozens of borrowers (and lenders) negotiate forbearance agreements. They also help borrowers execute on the terms of forbearance as a CRO and workout advisor. Let Ampleo help ensure the gift of forbearance provides the keys needed to effect positive change in the business.

The Role of the CFO: Navigating the Perception Gap
CFO Services
CFO Summit

The Role of the CFO: Navigating the Perception Gap

December 7, 2021
5
min read

There is a worrying trend in the world of senior financial leadership: an increasing number of companies are unaware of the value CFOs can bring.

Ampleo blames it on the current CFO perception gap. Let’s discuss what that is and what the role of the CFO really should be.

The CFO Perception Gap

We’ve noticed a direct correlation between the size of an organization and their perception of what the role of the CFO should be in a company.

Smaller organizations tend to not fully understand how a CFO can add value to their business. These organizations are usually the ones that assume CFOs are primarily responsible for accounting and forecasting. While these tasks are functions that a CFO can tackle, they don’t even scratch the surface of the value of a CFO.

Meanwhile, as a company matures, they begin to view CFOs as strategic partners who can develop long-term financial plans that set the company up for growth and success.

What’s Causing the Gap?

Why does this gap exist? There could be a myriad of reasons, but we’ve narrowed it down to a couple:

CFOs of the Past (Self-Inflicted)

Part of the problem may be the fault of CFOs (or at least those in the past). Before, a CFOs primary purpose was to protect assets. That led many CFOs to be so protective of the assets that they didn’t end up doing anything to grow them.

The Evolution of the CFO Role

Luckily, the role of the CFO has evolved to be more focused on value creation—finding a way to actually grow the assets rather than protect them. Many CFOs can even manage this while working remotely.

But here’s the problem: many CEOs and company execs are stuck with the perception of the old type of CFO mentioned above. Because CEOs don’t understand this new and developing value, makes them slow to adopt CFOs today.

How to Close the Gap

What can be done to close this gap and show the true value of CFOs in your business? Simple: by becoming a transformational CFO. Let’s talk about how to become a CFO who can inspire this change.

How to Become a Transformational CFO

The key to becoming a transformational CFO is the ability to frame up the right decisions, financial and otherwise, that an organization should make. How can you do that effectively? We suggest that there are three steps to doing so:

1. Create a framework that clearly illustrates how value is created in the organization.

Too often in business, people only tell the CEO what they want to hear, which sometimes leads to bending the truth. While doing so may keep you in the good graces of the CEO, it smothers the more inconvenient facts with flowery and misleading language.

Unfortunately, value cannot be increased with hyperbole—it needs true data.

To be transformational, CFOs must look at the data they gather and deliver a completely transparent report of what they’ve found. From that report, CFOs can create frameworks that genuinely drive good business decisions.

2. Invest in and upscale the organization’s finance teams.

Improving finance teams doesn’t just mean looking for the best candidates—though that is part of it. To truly be competitive in today’s market, CFOs must be willing to invest in technologies that upscale organizations. These are items like:

  • Artificial intelligence: AI technology can help finance teams augment their own intelligence, helping them sift through mountains of data to find really important information.
  • Automation: Manual processes plague too many finance departments, causing teams to take more time to complete menial tasks. Automation will help remove that burden and allow CFOs to focus on more important tasks, like data analysis.

3. Motivate the team to execute your finance strategy.

Once finance teams are properly trained on ROI thinking, they then need to go out into the organization to teach others this mentality. This will help the finance department develop the respect the CFO needs from the organization to properly execute their strategies.

Learn More about How CFOs Drive Value

As CFOs focus on these three points, they will increase their ability to drive value and become transformational CFOs.

If you want to learn more about what CFOs can do for your business, reach out to Ampleo. Our representatives will be more than happy to detail exactly how a CFO can change your life.

3 Principles On How To Solve Financial Crises
Cash Management
CFO Summit

3 Principles On How To Solve Financial Crises

December 7, 2021
5
min read

[LESSONS GARY CRITTENDEN LEARNED FROM 9/11 AND 2008]

Gary Crittenden is an executive director at Hunstman Gay Global Capital (HGGC), where he previously served as CEO and chairman. He was also a CFO for American Express and Citigroup, the latter of which he worked under during the Great Recession of 2007 to 2009.

During the 2021 CFO Summit, he shared three critical lessons he has learned about being a CFO during a financial crisis. We hope that these principles can even help you navigate the current financial crisis you may be facing.

LESSON 1: DON’T OVEREMPHASIZE THE DETAILS OF YOUR BUDGET

When Crittenden worked for American Express, he would often have meetings in the World Financial Center building, a tall skyscraper that overlooked the Hudson River. He happened to be in one of these meetings on the morning of September 11, 2001, where he sat no more than 100 yards from the Twin Towers.

Naturally, the catastrophic events which ensued had a devastating financial impact on many New York-based companies, including American Express. Despite this, American Express managed to produce eight straight years of terrific performance and growth as a company.

How did they achieve this? By limiting time spent on determining the details of a budget.

The reality is that most budgets become obsolete the day they are finished. Instead, companies should develop a budgeting and planning process that allows for flexibility and adaptability according to the financial landscape.

This is particularly important when businesses face financial crises. Just like in the aftermath of 9/11 and the current economic difficulties of the pandemic, flexible budget planning can make companies much more resilient and bounce back much faster.

LESSON 2: CONSIDER THE UNIT ECONOMICS OF WHAT YOU ADD TO YOUR BALANCE SHEET

Crittenden joined Citigroup at the beginning of 2007, months before the country plunged into the financial crisis of 2007 to 2009. While working there, he discovered many issues that Citigroup had with their financials, particularly that they were putting dollars and products on their balance sheet that created net income.

This may sound like a positive thing, but Citigroup failed to recognize the full cost of capital required to justify keeping those products on its balance sheet. The result? In the case of Citigroup, shareholder value was destroyed, the rapport between Citigroup and their customers was lost, and the CEO had to resign.

So, unless you consider the unit economics of what you’re adding to your business, you’re probably accounting for things that aren’t going to be helpful in the long run. And, as a result, you may end up investing in short-term gains that actually harm your bottom line.

LESSON 3: THE MOST IMPORTANT JOB OF A CFO IS LIQUIDITY

The most common reason companies fail is because they lack liquidity. So, while CFOs will help balance budgets and ensure revenue streams are well-established, their top priority is to make sure the company remains liquid.

Crittenden ran into this problem during his time at Citigroup. During the financial crisis, Citigroup attempted to acquire Wachovia, a financial services company based out of North Carolina. While the deal seemed to be going through, Wachovia made a last-minute decision to sell to Wells Fargo. Because Citigroup had invested so much into this acquisition that fell flat, they later had to be bailed out by the federal government.

BE BETTER PREPARED FOR YOUR FINANCIAL CRISES

Hopefully, you won’t have to learn these lessons first-hand and can rely on Crittenden’s extensive experience in the industry. By applying these three principles to your practice as a financial professional or CFO, you know how to navigate any financial crises facing your business.

If you’re reading this and do not currently have a CFO working with your business, we encourage you to learn about outsourced CFOs and how they can prepare your business for the future.

The 4 Strategic Roles of Today’s CFO
CFO Services
CFO Summit
Strategy

The 4 Strategic Roles of Today’s CFO

December 7, 2021
5
min read

Financial data is responsible for being the institutional memory of the company. It helps us identify ways to develop a strategy and make the right choices.

Today, a CFO should understand this crucial role of finances and use it to inform their decision-making. Only then can they truly be considered a strategic CFO .

But what are the other characteristics of the strategic role of today’s CFO? Kent Thomas , a founder of Ampleo, shared some insight into this question at the 2021 Intermountain CFO Summit . We’ve summarized his thoughts below.

What Isn’t Strategic?

Before we get into what makes a strategic CFO, it’s worth mentioning which activities are not strategic.

  • Creating accurate financial statements by the beginning of the following month
  • Clarifying the duties and responsibilities of their accounting and finance teams
  • Distributing annual budgets ahead of the upcoming fiscal year
  • Conducting regular meetings with department heads to discuss finances

Why don’t these tasks establish a strategic CFO? While they are essential for most CFOs to complete, they are not future-oriented. Just as it’s hard to drive while looking at the rear-view mirror, CFOs cannot be strategic by only looking at what they’ve already done.

Now, let’s talk about what it looks like to succeed as a strategic CFO.

What Makes a CFO Strategic?

What role do you fill as a CFO at your company? The answer is broader than the general understanding of what a CFO does. Thomas suggests the CFO’s role in strategic planning can actually be divided into four different titles.

1. The C-Suite’s Strategic Financial Partner

Every business’s c-suite (the executive level of the company) needs a business partner who can implement financial strategies and anticipate their executive’s needs. These are the primary strategic responsibilities many CFOs quickly adopt when starting at their company.

How to Fulfill This Role

  • Automate everything: If you haven’t automated your manual processes yet, you’re already falling behind. You can easily automate tasks like completing regulatory compliance and creating timely and accurate reports.
  • Adopt a “service provider” mentality: CFOs should want to ensure executives are happy with their financials and/or the information they’re receiving about those financials.
  • Offer unbiased analyses: CFOs should not be yes-men or women. Therefore, they must be straightforward about their findings: “This is what we need to do, and this is how we should do it.”

2. The Chief Future Officer

CFOs ensure that a company can survive. Therefore, they need to be focused on the company’s future and growth strategies.

How to Fulfill This Role

  • Support profitable planned growth: CFOs must know how to spend money to make money and optimize their cash flow management. This means accruing and allocating capital to places that can inspire growth.
  • Overcome or relax constraints: Every company today faces major constraints. For example, hiring hurdles put up by COVID-19 and an increasing desire to work remotely has led many companies to become fully remote. It’s the job of the CFO to help discover creative ways to alleviate the burden of these constraints.
  • Manage risks: Industries are always disrupted and challenged. It’s up to the CFO to either identify those disruptions/risks ahead of time or know how to navigate those changes when they arrive.

3. The Chief Trust Officer

You have to be trustworthy. While this should be the case for every member of the c-suite, it is particularly imperative that the CFO, the arbiter of financial information, is transparent, honest, and accountable.

How to Fulfill This Role

  • Be honest and humble: Acknowledge what shortcomings were your fault. Likewise, be humble enough to recognize team efforts when you receive praise. This inspires confidence in the employees you lead and the executives you work beside.
  • Hold others accountable: You must be willing to stand up to the CEO, as well as other executive members, and hold them accountable for their actions and choices.
  • Build loyalty and commitment with outside stakeholders: Too often, CEOs are not honest with their vendors, suppliers, and other stakeholders because they are afraid to be the bearer of bad news. CFOs, on the other hand, must continue to be honest with these stakeholders and build a strong rapport with them to produce a long-lasting relationship.

4. The Board Advisor

This is a role that many CFOs may not consider, but it is just as crucial as the other roles we’ve mentioned. Why? Because other board members will look to the CFO to really understand what’s going on within a company.

How to Fulfill This Role

  • Honor your fiduciary responsibilities to all shareholders: For all outside investors, you need to ensure each person receives their money’s worth. For example, if one of your series B investors tries to take punitive action that can negatively affect other investors, it’s your responsibility to call that out.
  • Build relationships with each board member: Again, you want to have a serviceable mindset. Get to know each board member, take them out to dinner, and get to know what they want out of the company.
  • Call out elephants in the room: There will be plenty of awkward topics to broach during your board meetings that no one will be willing to talk about. Since CFOs have the financial context for these problems, they should be the ones to bring it up.

Become a Strategic CFO in Your Company

By focusing on these four roles, CFOs can become the strategic partner every company needs to stay competitive and afloat.

Is your company looking for a CFO that exudes these qualities? Look no further: Ampleo’s outsourced CFO services will help you find the perfect candidate to support your executive team.

When To Hire A CFO For Your Startup
CFO Services
Hiring
Startup

When To Hire A CFO For Your Startup

November 29, 2021
5
min read

So you’ve got a new startup. You’re the CEO , and you’ve got a partner and a small team. You are managing your business’s finances because no one else knows how to, but your only experience is from a few courses in college and quite a few YouTube videos.

How do you know when to bring on a finance team member or hire an outsourced financial services company? Here’s everything you need to know about when to hire a CFO .

Is Having a CFO Necessary for a Startup?

Let me phrase the question a little differently, “Is it ever too early to have access to a financial thought leader in your business?” To be frank, the need for a full-time CFO depends entirely on the current needs of your startup. But if you’re ready to expand and grow your business, then a CFO can be an incredible ally.

Here are some essential tasks CFOs complete regularly. If you are not familiar with or trained in these tasks, then finding a CFO should be a top priority.

  • Managing cash flow: CFOs identify reliable sources of capital coming into the business and offer suggestions on where that capital should go. Doing so helps minimize financial emergencies , pay employees on time, and ensure you have enough liquidity (perhaps the single most important role of a CFO) to achieve your goals.
  • Analyzing (and producing) financial reports: CFOs create financial reports that go over your company’s fiscal wellness and efficiencies. They also analyze the reports and pinpoint areas of improvement. If you don’t have the proper training, it is very difficult to identify those opportunities, even if you have an amazingly detailed report sitting in front of you.
  • Setting realistic goals: While it is your job as the CEO to create and finalize company goals, the CFO offers a lens of financial achievability on those goals. In doing so, they can create an operating plan that allows you to better align your financial strategy with those goals.

How Do I Know If I Need a CFO?

If you have trouble with the above concepts (cash flow management, finance analytics, and financial goal setting), you could seriously benefit from hiring a CFO. Aside from that, there are other questions you may want to consider to determine if your startup needs a CFO:

  • Could you benefit from a more experienced business perspective? CFOs offer a profound understanding of business practices. This perspective could keep your business from making the same rookie mistakes as other startups.
  • Is managing your finances becoming unmanageable? It’s very common for CEOs or controllers to manage a business’s initial finance and accounting. But at a certain point, your business’ growth may make those finances unmanageable for the uninitiated. Having a CFO can give you a competitive advantage.
  • Do you need help figuring out how to allocate your investment funds? CFOs offer rich insights into how you should use your funds from all rounds of funding. So if you don’t have a set plan, CFOs will help you establish one.

Do I Need a Full-Time CFO?

You may see these benefits and reasons to hire a CFO and think, “I simply cannot afford a full-time CFO.” We have good news for you: There’s no need to hire a full-time CFO. Hiring a CFO that’s part-time or fractional allows startups to achieve better financials with less expense.

Outsourced CFOs

In your early stages, there isn’t much need to have a CFO in the office at all times. They’ll mostly help you establish a working financial plan and offer suggestions on how you can improve your business’s financial performance. That does not require a full-time commitment—even a couple of meetings a month will do.

Outsourced CFOs are experienced CFOs who work on an hourly or fixed basis. Most perform part-time, full-time, and interim CFO work, depending on your company’s needs. With the average CFO making a salary of nearly $400,000 a year , most startups don’t have the luxury (or need) to hire a full-time CFO.

Not only will o utsourced CFOs save you money in the long run, but you’ll also get access to experienced professionals who have worked with several other startups or early-stage businesses. They’ll be even more equipped to spot opportunities and threats, then act accordingly. Hiring this way puts the experience of the experts in your hands, giving you the best bang for your buck.

When Should Startups Get a CFO?

According to TechCrunch , the “ old rule ” of when to hire a CFO was to wait until the business reaches around $100M in revenue, or is preparing for an IPO. However, new best practices show that this is no longer the case for most startups.

Nowadays, finance departments contribute more to the company than ever before. Once “bean counters , ” CFOs not only acquire and package the right data, but also model, forecast, and strategize across the organization.

Because of these major changes in the finance department of all businesses, startups can especially benefit from hiring a CFO early. Since the key role of a good CFO involves strategizing and planning, hiring early can allow your startup to take advantage of opportunities and avoid threats from the beginning . This additional financial planning and analysis can be the difference between a failed startup and a successful one.

Hire Early, But Not Too Early

Working for a startup often means loose job descriptions, which can lead to having too much responsibility . Many founders start by doing the books themselves while also managing the business. Dave Chase , CEO of Ampleo , says,

“CEOs have to be honest with themselves in how they should be spending their time. If they could have a greater impact and provide more value doing something else, get out of the financials.”

As CEO of a startup, ask yourself, “Am I really contributing the most value by spending my time working through the financials?”

While it is important to hire a CFO early, it is possible to hire too early. Because many startups are cash-strapped, it may be appropriate for a founder or other key team member to handle the finances of the business for a time.

However, as Dave Chase recommends, once their expertise, experience, and time are better used elsewhere, it’s time to bring on a professional. CEOs should consider their funding and make a decision weighing the experience of their team against the expertise needed to succeed.

What Should I Look for When Hiring a CFO?

How do you hire a CFO? The process can be particularly puzzling if it’s your first time dealing with one. There are several qualities you should consider when looking for a CFO for your startup. Here are a handful of qualities that can make a CFO successful at your company.

  • Is a strategic thinker, not just a strong technical accountant
  • Passion and/or experience with your industry
  • Strong communication skills—especially if your CFO is working remotely or part-time
  • Fits your company culture
  • Has worked in a variety of industries, so they know how the same financial practices apply to different scenarios

When you work with an agency that finds a CFO for you , you can rest assured knowing every candidate is incredibly experienced and qualified to be your CFO.

Questions to Ask CFO Candidates

If you wish to hire a CFO but aren’t sure what kind of questions you should ask in the interview, consider trying out some of the following:

  • How did the financial roadmap you developed for your previous company help them to succeed?
  • What challenges do you anticipate our company facing during the growth stage?
  • What might you put on the agenda for a finance meeting?
  • What is an example of one thing you would do to improve our finance team?
  • How would you ensure our company achieves its financial goals?

Explore Outsourced Services

When it comes to your startup, hiring the right CFO at the right time is crucial. Once your time as a founder is better spent running the business rather than managing the books, you should consider hiring a CFO. Whether outsourced or in-house, a good CFO can be a game-changer for your business.

Ampleo offers the full suite of financial services, from CFOs to c ontrollers, accountants, and bookkeepers . You can trust that your business is in the hands of seasoned veterans, ready to take your startup to the next level. Contact us today to find the perfect fractional CFO.

How to Find a Business Mentor [& Why You Need One]
CFO Services
Leadership

How to Find a Business Mentor [& Why You Need One]

November 18, 2021
5
min read

Yes, even CEOs need a business mentor. The CEOs who have inspired me most are those that recognize where they have gaps in their knowledge and experience and proactively seek a mentor to help build their knowledge. Getting a mentor will help your business thrive by adding strength to currently weak areas. But before we get to how to find a business mentor, let’s talk a little more about what a business mentor is and why you could benefit from one.

What Is a Business Mentor?

A business mentor is an individual who has extensive experience in a certain field. The mentor will share their knowledge and wisdom with the mentee (also known as the protege) (you). The right mentor can effectively guide you toward achieving professional goals by giving you advice and suggestions on how to get there.

New CEOs seeking mentors should look for one that is experienced in business management, strategy and know what it takes to start and run a business.

3 Reasons CEOs Need a Mentor

No matter how much experience you have at running a business, there is always room to improve. CEOs can continuously learn how to inspire greater results from their employees and organize their companies for improved efficiency. Talking with a mentor can help you accelerate this change.

Aside from the educational opportunity, here are three reasons CEOs should seek out a mentor.

1. Offers Fresh Perspectives

New CEOs face many unique challenges right at the start. And more than likely, you won’t be incredibly confident in how you should make those decisions, simply because you haven’t ever had to make those kinds of decisions before.

On the other hand, a mentor has likely helped make similar decisions many times in the past and in a variety of different situations and industries. As a result, they are well-equipped with the right experience to offer insights to help you make the right choice.

2. Creates Feedback Loops

Even CEOs need reassurance that they’re doing a good job (or that they have room for improvement). While you can gain some value from surveying your employees to determine how you could be a better leader, a mentor can back those suggestions up with industry experience.

With a mentor, CEOs have a dynamic form of feedback. If you have a specific leadership skill you wish to focus on, your mentor will have previous experience to help you develop that skill.

When creating this feedback loop, you may consider the following questions to ask your business mentor:

  • How do you encourage innovative ideas?
  • If you were me, how would you have approached [certain situations]?
  • What values should our business commit itself to?
  • How can you separate emotions from your decision-making?

3. Flattens the Learning Curve

It’s no secret that being a CEO involves a massive learning curve. Not even a highly experienced manager automatically has every skill and characteristic required to be an excellent CEO. Business mentors can help you identify your skill gaps and train you to be an efficient and effective CEO.

Additionally, there are a lot of terms and business practices you’ll need to be familiar with. If you have questions about any technical aspects of being a CEO, mentors can be an excellent resource.

How to Find a Business Mentor

There are clearly plenty of benefits to finding a business mentor, but where’s the best place to find one? Here are a few people and places you may consider using to start your search:

  • Look within your network: Chances are there are several people in your LinkedIn connections or phone contacts who would make excellent mentors. Chat with these individuals and set up a lunch appointment to talk about the possibility of a mentor relationship.
  • Join professional associations: Is there an association or group related to your industry? Joining these types of groups can introduce you to an abundance of experienced professionals. They may also inspire productive conversations that spark ideas, essentially working as an unofficial mentoring session.
  • Consider professional service firms: Business leaders today are outsourcing critical functions including CFO, HR, IT, and marketing services. Service providers in these outsourced firms work with many different business leaders across a diverse group of industries. They make excellent mentors.
  • Reach out to your ideal mentor: Maybe there’s someone in your industry that you don’t have any shared connections but who was an inspiration for your business model. Don’t be afraid to reach out to them! The worst-case scenario is they say no. Otherwise, you may manage to get your dream mentor (or at least have them in your contacts).

Can CFOs Be Business Mentors?

CFOs can be great business mentors for new CEOs and entrepreneurs. My colleague, Dave Chase wrote the following article outlining why CFOs are essential for any business . For the same reasons, CFOs make great business mentors. This is particularly true for fractional CFOs who have worked in a wide variety of industries and, as a result, have seen how different CEOs operate their business.

CFO mentors can pull from this experience and inform new CEOs of which practices they’ve observed to be incredibly successful. Conversely, they may warn CEOs to stay away from detrimental behaviors or decisions they’ve witnessed.

Many times mentors will give their services for free, as a coach. Be careful to not ask too much of them. When the commitment for your mentor becomes more than an hour or so per month, offer to pay for their services. In today’s world of fractional professional service offerings, hiring mentors to become part-time CFO, HR leaders, CMO, etc. is quite common.

Use Ampleo to Find the Right CFO Mentor

If you intend to use a fractional CFO service , we recommend you use Ampleo’s solution. In addition to exploring which mentor is best for your business, we can help you know when you should hire a CFO . We have dozens of CFOs that are all trained in unifying financial information with business strategy and are willing to give free advice or plugin on a part-time basis as your CFO. Simply contact us today so we can help match you with the perfect mentor and/or CFO for your business.

Seeing Your CFO as a Strategic Business Partner [& How This Benefits You]
CFO Services
Strategy

Seeing Your CFO as a Strategic Business Partner [& How This Benefits You]

October 21, 2021
5
min read

The role of a Chief Executive Officer or CEO is not for the faint of heart. You’re constantly faced with making tough decisions, many of which directly impact the growth of your business. However, hiring a Chief Financial Officer or CFO—even in a part-time or outsourced role —can be a strategic move that ensures your business’s success for years to come.

But how exactly do they help your company? Before we go into the responsibilities and benefits of having a CFO as a business partner, let’s first discuss what a CFO does in a business.

What Does a CFO Do in a Business?

In a nutshell, a CFO’s job as a business partner is to ensure that your company can grow and be more profitable. They assess its finances and help develop strategies to address its shortcomings and ways to improve outcomes.

How Do CFOs Support CEOs and Their Financial Strategy?

CEOs should realize that CFOs have one primary concern: To give the CEO peace of mind when it comes to their financial and operational strategy. As such, when looking for a CFO as a business partner, you can expect them to help you with the following when it comes to finances.

Developing the Financial Strategy

The CEO is the leader of an organization. As such, it falls to the CEO to set the financial strategy. While CFOs can (and probably should) be involved in the development of the financial strategy, CEOs will get the final say. But once that strategy is set, it is up to the CFO to make it a reality.

A significant element of the overall financial strategy is an operating plan that mirrors it and it is the CFOs responsibility to ensure this is the case.

The Operating Plan

An operating plan is essentially a budget that dictates how the company can align the business with the strategy— and according to Michael Porter of Harvard Business School, you should be able to see your strategy by looking at your financials.

This means allocating capital toward people and initiatives that will help drive your strategy. What does that look like? Let’s take IKEA’s financial strategy as an example:

IKEA, when compared to other furniture manufacturers, spends comparatively very little money on product development and shipping. This aligns perfectly with their mission to deliver simple and elegant self-assembled furniture items.

Likewise, your CFO should organize your budget according to your business’s unique strategy.

Keeping People Accountable

As a part of running the operating plan, CFOs will also monitor the different branches of the company to hold them accountable for those goals. To establish accountability, the CFO may look at performance metrics or hold regular meetings with employees. These metrics will help the CFO give the CEO confidence in their financial strategy and performance.

Supporting Financial Integrity

Financial integrity is the process of making sure financials are compliant, accurate, and meaningful. That way, CEOs and other executives can have the confidence that their decision-making is informed by the correct data.

While CFOs may not be the ones that always create financial reports, they will establish protocols and expectations for those that do. When managing financial integrity in reports, CFOs should manage to do two things with the data:

  • Ensure Accuracy: In this context, accuracy doesn’t just mean correct. It should also be relevant and timely to the current state of the company.
  • Organize it to Be Useful: Just because data is accurate does not necessarily mean it is helpful. CFOs should work with a company’s financial analysts to organize the data into actionable advice. And having a strategic financial mind on the team is crucial because every business is unique and needs customized metrics and analytics.

Managing Capital

To support financial strategies, CFOs will also help manage the allocation of money and people within the company, which we can simply refer to as capital management.

CFOs will ensure that the company has the right kind of capital (and the right amount) for the business to run properly. And while they won’t be in charge of managing every employee the company needs to succeed, they will certainly be directly responsible for staffing the finance team.

Capital Budgeting

CFOs will also help manage large ticket items. These are items or pieces of equipment that cost large sums of capital and require a look at the potential return on investment. CFOs ensure a healthy ROI but will ensure those purchases are also aligned with the financial strategy.

3 Benefits of Working with a CFO as a Business Partner

With these responsibilities in mind, what exactly are the benefits of having a CFO as a strategic partner in your business?

1. You Have a Source of Financial Insights

CFOs help your business succeed, and they’ll do their best to ensure that you’re making the right financial decisions. For example, they can offer tips on what marketing campaigns are worth investing in or not, or if it’s a good time to hire new employees or buy new technologies to boost your production rate. They could also point out tax deductions and other benefits that your company hasn’t taken advantage of yet.

2. Minimize Financial Risks While Increasing Profits

Because CFOs will help you make more informed business decisions, you can better protect your company from needless expenditures. But at the same time, they also can guide the company on which risks are worth taking to boost profitability.

For instance, they may recommend slightly lowering the price of a product or service that isn’t selling well. While this may temporarily decrease the profit earned for each item, it could also lead to higher sales volumes, making up for the lower profit margin, and help turn inventory into cash.

3. Ensure Long-Term Success

Working with a CFO as a business partner will lead to a greater understanding of your business’s finances and how to manage and invest your resources according to the financial strategy.

Even if the CFO is only working for you part-time, the strategies they help implement and the insights they provide can help you run your company more effectively in the long run and provide a path to greater opportunities to expand.

Get a Professional CFO for Your Business Today

Now that you understand the benefits of having a CFO as a company partner, you can determine whether it is time to recruit one.

At Ampleo, our CFOs will analyze your financial performance and provide tailor-made solutions based on your business’s needs.

Message us today, and let’s discuss how to have an outsourced CFO strategy planning with you.

Three Predictions For Turnaround and Restructuring Professionals
Turnaround & Restructuring

Three Predictions For Turnaround and Restructuring Professionals

October 20, 2021
5
min read

The last 18 months have been strange for workout lenders, bankruptcy attorneys, and turnaround and restructuring professionals. Despite a global pandemic that brought significant shifts to entire industries and workplaces, commercial bankruptcy filings have been eerily low. At the time the global pandemic rocked the United States in March 2020, many bankruptcy professionals expected a “bankruptcy pandemic” to follow soon after.

That didn’t happen.

Instead, three federally-enacted life-saving support programs bolstered troubled businesses. These include the COVID stimulus fund programs, foreclosure moratoria, and relaxed banking regulations. These programs postponed the triggers that typically trip companies into filing bankruptcy. As we attempt to resume “life as normal” and these federal programs expire, many are asking what will happen to troubled businesses and the turnaround and restructuring community.

Here are my predictions:

  1. There will be a “surge and shelf” in insolvency cases. The COVID-enacted life-saving support programs only masked problems for many companies, and reconciliation of businesses’ debts will soon come due. I expect federal and state governments to continue to extend programs to soften the landing, however, these will only spread out a pent-up wave of activity – they won’t solve underlying problems. I expect to see a surge of new insolvency cases beginning Q1 2022, and a continuation of higher-than-normal turnaround and restructuring volume for the next two years.
  2. Lenders and borrowers will become more creative to resolve problems. The first remedies insolvent businesses tend to think of are traditional Chapter 11 or Chapter 7 bankruptcy filings. With a wave of new insolvency activity, we will see debtors and creditors exploring alternatives to bankruptcy including out-of-court workouts, state court receivership, and assignments for the benefit of creditors. I also expect many more subchapter V cases and pre-packaged chapter 11 filings.
  3. Asset sale values will fall. Given the wave of distressed assets hitting the market, recoverable values will decline. This will be exacerbated by inflation, higher corporate tax rates, and reduced market liquidity. This will result in poorer recoveries to creditors and will have downstream effects on the solvency of those creditors thereby compounding the problem. This gives rise to my prediction above that the wave of turnaround and restructuring volume will continue for at least two years.

So what’s a troubled company to do?

Company leaders that are asking how their companies will survive when relief programs expire should take proactive action. First, they should forecast cash to anticipate when shortfalls may occur and consider steps they can take now to mitigate those shortfalls. Second, they should retain the right professionals to help sooner than later. Third, with the professionals’ help (and on their advice for each unique situation) they should begin negotiating with creditors, suppliers, and landlords before missing payments and tripping covenants. Taking these three steps early almost always yields more favorable results.

If you or your clients are concerned about insolvency and are ready to take action to address the challenges ahead, contact Ampleo. Our team of turnaround and restructuring professionals will help you navigate a difficult path and help you make the right decisions for your business.

Three Predictions For Turnaround and Restructuring Professionals
CFO Services
eCommerce
SaaS & Software

What Are Outsourced CFO Services [& Why Your Business Needs One]

August 30, 2021
5
min read

Every business’s growth is complicated. With a combination of unique industries, differing business goals, and diverse ways to raise capital, it’s safe to say that nearly every small- to mid-sized business has a different origin story.

But what about your future? Are you poised for growth? The best way to figure that out is with an outsourced CFO service.

Outsourced CFO services are designed to align your strategy with the operations of your business. In this article, we’ll address what an outsourced CFO is, the service they offer, and the unique benefits you can enjoy from working with one.

What Is an Outsourced CFO?

An outsourced CFO, also known as a virtual, fractional, or remote CFO, is an executive that businesses can use as a financial expert on a part-time or project-based basis. Outsourced CFOs often operate at the executive level, acting as financial advisors for a company’s executive team and outlining high-level plans and roadmaps for the company to abide by to achieve its financial strategy.

Hiring outsourced CFO services is an ideal option in the following scenarios:

  • Growing companies that can’t afford a full-time CFO
  • Growing companies that don’t yet need a full-time CFO and want to optimize their spending on other resources
  • Companies that seek an interim CFO while looking for someone to take the position full-time
  • Companies that need an experienced vision for their financial roadmap

What Do CFOs Consider to Be Their Top Priority?

The top priority for many CFOs is to firmly establish a strategic financial vision for the company they work with. To achieve this goal, a CFO must be able to address the following two points:

  • Potential blind spots in a leadership team’s strategy
  • A method for capital planning and acquisition

Blind Spots

If the executive team announces a new business goal, it’s the CFO’s job to address the financial implications and requirements of the decision. They’ll ask questions like:

  • Does the company’s current goal reflect trends in the company’s revenue increase?
  • Can the company’s current cash flow support the strategic goal in question?
  • If current cash flow cannot support the strategy, what has to be done to get it to the correct levels?

Capital Planning & Acquisition

Strategic planning in finance also needs to be future-oriented. As such, CFOs will look at the trajectory of a company and answer the following questions:

  • How much money will the company need in the future to continue growing at the current rate?
  • Can the company currently survive an economic downturn, and if not, what must be done to prepare?
  • What capital acquisition strategies should the company pursue?

What Does a Virtual CFO Do?

Virtual CFOs are primarily meant to oversee and consult for a company’s financial trajectory. That means there will be a lot of overlap between the tasks of a virtual/part-time CFO and a full-time CFO:

  • Virtual CFOs often outline a company’s financial plan. One of the primary roles of a CFO is to add some financial realism to a company’s goals. For example, if a company wants to break out into a new market, a virtual CFO can give them a realistic estimate of how much that will cost and what the risks are. Fractional CFOs can also structure a plan from scratch if a company has no existing financial plan.
  • Virtual CFOs help in the search for a full-time CFO when applicable. If a virtual CFO is hired to fill the position while a company looks for a new full-time CFO, the virtual CFO can help find a qualified candidate. While doing so, the virtual CFO can identify specific needs the company has and help look for candidates who could address those pain points.

What Types of Financial Services Are Outsourced?

The services a virtual CFO can provide are identical to those provided by a full-time CFO However, in general, you may enjoy any combination of the best outsourced CFO services:

  • Cash management
  • Strategic analysis
  • Profitability analysis
  • Merger/acquisition support
  • Long-term financial forecasting
  • Scenario modeling
  • Mentorship for financial teams
  • Scalable financial technology solutions

What Are the Benefits of Having an Outsourced CFO?

Instead of exploring every reason why you should hire an outsourced CFO , here are six important benefits you can expect:

1. Improved Financial Literacy

You aim to hire the best when finding candidates for your finance team opening, but those hires can always improve their skills. With outsourced CFO services, inexperienced finance teams can be trained and improve their financial literacy, elevating their skillset to be beyond industry standards. Further, a capable engaged CFO will improve the financial literacy of the entire organization.

2. Realistic Perspective on Business Goals

Sometimes, executive teams get a little over-ambitious with their business and marketing goals. This is true for many businesses, but start-ups need fiscal realism in particular, which allows for hope and dreaming but is also indescribably achievable. To help, virtual CFOs will take an honest look at company goals, help outline operational priorities to achieve them and determine how much capital they would need to achieve their lofty goals.

3. Better Prepared for Fast-Paced Transitions

Fractional CFOs hit the ground running. They quickly engage with their business to ensure a steady financial plan is developed and actionable steps are established to put it into action.

This is particularly helpful for eCommerce businesses, an industry that is growing at a rapid pace. Having a cemented financial plan early on can help new eCommerce businesses stay ahead.

4. Access to Industry-Specific Knowledge

It’s not enough to be a financial expert—a fractional CFO should also be an expert in your industry. This is particularly important in industries like SaaS; there are certain success metrics a CFO must be aware of in the SaaS industry that are widely different from other industries. Fortunately, a fractional CFO ensures that these metrics are considered in their financial strategy.

5. More Cost-Effective

Most small and mid-sized businesses don’t have the capital or need to justify hiring a full-time CFO. However, every company needs to have a long-term forecast for its financial strategy. Virtual CFOs allow these companies to prepare for the future without breaking the bank. Jeff Epstein, an operating partner at investment firm Bessemer Venture Partners and a former CFO of Oracle Corp., remarked that he always advises founders of early-stage firms to “hire a part-time CFO so they can focus on building and selling their products instead of managing the finances .”

6. Improved Long-Term Scalability

Every business wants to stick around for the long haul—CFOs help make that dream a reality. By creating financial plans and using the right capital acquisition strategies, your business can better scale for growth and be prepared for the future.

How Much Does an Outsourced CFO Cost?

An outsourced CFO’s cost will vary depending on your industry and location. But with that in mind, the average cost for an outsourced CFO could range from $3,000 to $10,000 a month.

How Do I Find and Hire a Virtual CFO?

Finding the perfect CFO for your business can seem daunting, but it can be made easier with a trusted partner like Ampleo.

Ampleo works with dozens of CFOs with expertise spanning various industries, making it easier to find the right CFO for your company.

To support our outsourced CFO services, Ampleo also offers financial controller and accounting services. These services can help operations run more smoothly as your outsourced CFO begins to develop and apply a new financial strategy.

Finally, if your company’s finances aren’t going in the right direction, Ampleo’s turnaround and receivership services can help.

See What Ampleo Has to Offer

If you are in the process of outlining a financial strategy and believe a fractional CFO would help, please consider what Ampleo could do to assist you. We have an entire team of experts ready to help you achieve your financial goals—contact us today!

Why Building Rapport With Customers Is Important
Leadership

Why Building Rapport With Customers Is Important

August 25, 2021
5
min read

As any sales or marketing professional knows, building rapport with the potential customer is an extremely important part of the sales process. Successfully building trust and rapport with a customer can make the difference between a prospect’s “yes!” and “no”.

Here is a bit more information about what rapport is, the benefits of building rapport, and why it’s so important when interacting with your customers.

Why Is Rapport Important?

Rapport is important because it is the fundamental base of a sincere relationship with your customers. Rapport is based on taking the time to get to know someone so you can speak directly to their needs, dreams, and pain points. Rapport helps create a lasting connection with your customers where they learn to trust you and your brand.

What Are the Benefits of Building Rapport?

The importance of rapport cannot be understated. It takes time to develop, but it’s worth it. Working to establish rapport will help you to establish trust and earn respect from your customers. As you develop trust your customers become invested not just in your product or service but in you. This can help increase sales, decrease client churn, and lead to priceless customer referrals.

What Happens If You Lack Rapport?

If you don’t establish rapport with your customers, your brand becomes yet another faceless and emotionless brand. They have no connection or relationship with your brand. Customers will quickly abandon your company for one that is cheaper, faster, and friendlier if they’re not connected to your brand through rapport.

Opening the Gate for the Sale

Rapport is the gatekeeper to the sales process. By skipping this step, the salesperson is inviting the prospect to slam the door, hang up the phone, or end the sales meeting right then and there. In order for a sale to proceed, a certain amount of trust needs to exist between you and your prospect. Without it, the sales process never really takes place.

Wowing Your Customer Now and Later

A good salesperson builds rapport by asking effective discovery questions. By discovering problems they need to solve, as well as interests and hobbies, you can wow your customer during the sale and after.

Think of how much more likely your customer is to say yes when you remember that his hobby is golf and have the final sales meeting at Top Golf, as opposed to the office. Information learned through the discovery process can make a powerful impression on the customer experience both before and after the sale.

The Difference Between a Lifelong Customer and a Chargeback

One of the most important factors in buying decisions is trust. Do I trust the product or service will be able to fix my problem? Do I trust they will deliver the promised good or service? Am I falling for another silver-tongued salesman?

Until rapport is built, the prospect remains skeptical of you, the company, and the product/service. A foundation of trust that begins before the sale and continues beyond the sale can make the difference between a lifelong customer and a chargeback. Once the sale is over, if the customer doesn’t believe the product or company will help them, they’re likely to leave for another who will.

The Customer is More Likely to Say “Yes”

Why is rapport important? Because you are more likely to effectively close a deal. Discovery questions communicate to the prospect that you care about them, not just the sale, and help you lay a foundation of trust. By discovering and remembering key pain points, you can later use these to help close a sale .

10 Ways Your Team Can Build Rapport with Your Customers

Rapport is powerful and can be the key to establishing lifelong customers. Here are ten easy ways your team can improve your rapport with customers.

1. Be Yourself

Building rapport with customers is all about building trust. Your customers will never trust you if you are disingenuous with them. While there is still a need for some layer of professional conduct, being yourself and letting your personality shine while interacting with your customers is a good place to start.

This is intentionally the first tip. If any of the future tips feel like you’re not being genuine or that you’re manipulating or lying to your customers, stop it. It is always better to be yourself than to try to create a false persona when building rapport.

2. Ditch Self Doubt

It’s difficult to develop rapport if you are convinced that you’re horrible, not worth attention, or that you’re worse than everyone around you. If you don’t believe people want to talk to you or that you don’t deserve to be in communication with them, you’ll never be able to build rapport.

You are worth being heard. You don’t need to do or be anything to gain that value. It’s innately yours. Your voice is worth hearing, and other people want to hear it.

3. Make a Good First Impression

By starting on the right foot with a good first impression, you set yourself up for building rapport later on. It is easier to build trust and empathy with a person when they already see you as someone who is friendly and interested in them. If you come off cold, disconnected, or annoyed by them, it’s going to take even more time to build a meaningful rapport.

4. Remember Their Name

You know the names of the people who are important in your life. By remembering a client’s name, you show that they matter to you and that you remember who they are. This simple connection starts the spark of trust between you and them and creates a space where you can effectively communicate with others.

5. Talk Less, Actively Listen More

No one likes a pushy salesman. They skip straight to selling and force a product or service they think is right for their customer. Their only goal is to make the sale, and they push their way to that sale. A better approach is to stop talking and listen. Listening to your customers gives you the opportunity to demonstrate you value them. Listening shows they are more than just a customer. Listening about their kid’s last band performance, a bad week in the office, or an amazing vacation they just had helps you become more connected and build a meaningful rapport.

6. Ask Questions

Asking questions forces your client to open up and share more. Find out everything you can about your client. Who are they? Where do they come from? What’s their history? What do they like? What do they hate?

As you are actively engaged with what your client is saying and getting to know them, you are building rapport by showing them that what they have to say is valued and important to you.

7. Find Common Ground

It can be frightening to deal with a customer from a different walk of life than you. Rather than finding differences, choose to find and highlight your similarities.

This will take time because you have to get to know more about your customers. Find out their goals and their pain points, and then find a similar feeling that you can relate to in your own life. The connections do not have to be a direct connection to build rapport. You can stretch and still find empathy and common ground. For example, what if your client said they hated pizza because it tastes like feet? You don’t have to agree with them, but you can still find common ground by telling them that you hate broccoli for the same reason. While you may disagree with them, you are still creating a bond of empathy through your hatred of food. Remember not to fake empathy when trying to find common ground. Do not lie about your commonalities because this will only build fake rapport.

8. Show Empathy

Empathy goes beyond hearing what a person is saying. It is about relating to what they are feeling. Some people try to use a phrase like, “I understand what you were feeling,” to show empathy. That phrase is worthless. It doesn’t demonstrate that you understand the message. Instead, try showing empathy with phrases like, “If I understand right, you’re feeling ” or “If I was in that situation, I would feel , too.” To go one step further, you can even share your reaction to how they are feeling to create a connection by saying something like, “Hearing you feel makes me feel because ____.”

9. Spend Meaningful Time with Them

Building rapport is personal. It’s not built in large groups or rushed meetings but in purposeful and intentional moments of one-on-one connection. Those moments where you are giving them your full undivided attention and are actively trying to listen and connect are the moments when rapport is built best.

10. Follow Their Lead

Rapport is built from communication and vulnerability. Rushing a conversation into sensitive or personal topics can do more harm than good. Because everyone has different histories and comfort levels when talking about topics, focus on what the other person wants to talk about.

For example, rather than jumping straight in and asking questions about their family, wait for your client to bring up their family first. Because they opened the door to the topic, you can then ask follow-up questions and start to build your connection and rapport.

Some clients will be cautious about sharing personal information. Follow their lead and respect their comfort level.

Ampleo Can Help

In every sale, take time to ask good discovery questions and build rapport with the prospect. By taking time to build a relationship and make connections with the potential customer, the sales processes will become a more comfortable and engaging experience for both you and the prospect, consequently leading to more successful closes.

Contact Ampleo to learn how to continually build rapport with every customer.

Outsourced Accountant Services: Why Your Business Can Benefit from Outsourcing
Accounting
SaaS & Software

Outsourced Accountant Services: Why Your Business Can Benefit from Outsourcing

August 11, 2021
5
min read

Having an accountant isn’t only for large companies. Learn about the benefits of outsourcing accounting and why you should hire an outsourced CFO.

What Are Outsourced Accounting Services?

Outsourced accounting services let every company benefit from a dedicated accountant without having to invest in a full-time accounting department. The outsourcing service manages the accountant and covers their salary, benefits, and taxes so your company can focus on what matters most for your business.

What Services Do Accountants Provide?

Outsourcing accounting for small businesses can provide automated bookkeeping, accurate accounting support, and strategic financial advice on growth plans, budgeting, financing, and pricing. For some businesses, accountants offer more than accounting assistance; they can also provide timely and accurate information with strategic support. Industries from e-commerce, SaaS, and more can all benefit.

How Does Outsourcing Work in Accounting?

Outsourced accounting works like an in-house accounting department. You outline the roles and responsibilities you expect them to cover, including accounts payable, accounts receivable, payroll, financial reporting, or any other accounting service, and then they provide that service. Hiring an outsourced accountant early in the life of your company can help give you the freedom you need to grow.

The best way to get the most from an outsource accountant service is through constant communication. The more they know about your business needs and concerns, the more they can tailor their services to meet those demands.

What Are the Benefits of Outsourcing Accounting?

There are numerous benefits of outsourcing accounting services through a third party.

1. Eliminate the Time and Cost of Onboarding:

The recruitment and onboarding process of an accountant is rigorous and takes a lot of resources. Rather than wasting time to find the right fit, outsourcing quickly provides the accounting services you need.

2. More Time to Focus on What Matters:

Outsourcing helps you delegate accounting duties, which gives you more time to focus on your customers.

3. Optimize with Automation:

Outsourced accountants know how to simplify and optimize their accounting processes with automation. Automation can save time, reduce risk, and minimize human errors.

4. Reduced Costs:

When you choose to go with an outsourced accountant, you don’t have to worry about continual employment costs like salaries, payroll taxes, or benefits.

5. Faster and Better Business Decisions:

Accountants do more than balance the books. They help business owners gather and interpret data to make well-educated business decisions in less time.

6. Minimize Risk:

Accounting and reporting errors can be costly. An outsourced accountant is able to help manage and prevent payroll and income tax mistakes.

7. Easily Scalable:

As a business grows and the demand for accounting increases, it’s simple to increase your contact with an outsourced accountant.

8. Experienced Consultant:

An outsourced accountant works with a wide range of companies and can provide valuable insights to your industry. They can act as an advisor or consultant and give advice about how to make accounting more efficient.

9. Minimize Paperwork:

Logging, analyzing, and reconciling payments and other financial records can include piles of paperwork and processing. An outsourced accountant manages all of the bookkeeping for you.

10. Get Full-Service Bookkeeping:

No matter what surprise or trouble that comes your way, you’ll get the professional accounting help you need.

11. Be Ready for Tax Season:

Tax season doesn’t have to be stressful. With an outsourced accountant, you know that your taxes are properly prepared and within full compliance.

12. Stay on Top of Your Financial Records:

It can be easy to fall a bit behind on balancing the books, which can create a guessing game when making financial decisions. An accountant will ensure your information is up to date.

13. Be Prepared for Any Crisis:

No matter if it’s a financial downturn, natural disaster, or global pandemic, small- to medium-sized businesses are hit the hardest when times get tough. A qualified accountant gives companies the assistance they need to prepare for and endure any major crisis.

14. Have No Fear of Turnover:

Business owners know that each member of their team is important, and one person leaving when you’re not prepared for it can create a lasting impact. With outsourcing, you can rest assured that you will always have a qualified accountant ready to help your company.

15. Reduce Technology Costs:

There’s no need for any accounting hardware or software when you outsource.

Get Started Today

Ampleo is ready to help take the guesswork out of accounting. With our accounting and CFO outsourcing solutions, your company benefits from years of experience for only a fraction of the cost of a full-time employee.

Contact us for a free consultation to see how outsourced accounting services can help your company grow.

Outsourced Accountant Services: Why Your Business Can Benefit from Outsourcing
CFO Services
Controller

Business Basics: The Difference Between Controllers and CFOs

July 12, 2021
5
min read

In many small businesses, the financial team may be made up of one or two people. However, as your business grows, it’s important to ensure you’re utilizing the right people and skills for different financial functions.

Two roles that often overlap as businesses grow are the roles of controller and CFO. Here are the main differences between controllers and CFOs, and why your company should consider having both.

What Is a Controller?

The controller of the business is the head of the accounting department. At larger companies, the controller manages a team of accountants to ensure timely and accurate reporting, budgeting, tax compliance, payroll, and other accounting functions.

In smaller companies, the controller may be the only accountant, supported by other accounting clerks. The controller traditionally reports to the CFO, but in small companies, they may report directly to the CEO or President.

Controller Duties

Most controllers will complete any combination of the following duties to support the CFO and/or the financial goals of their company:

  • Monitor a company’s financial reports
  • Determine ways the company could reduce costs
  • Prepare and present business reports, financial forecasts, and bank statements to the leadership team
  • Supervise employees who aid in the completion of financial reports
  • Stay up to date with current trends in the financial market

If business were a game of football, the controller would be the scorekeeper. They are meant to be more retroactive, consisting mostly of record-keeping and financial reporting.

With these varying duties, controllers never find themselves doing the same tasks every day. They could spend one day sorting through mountains of data, and the next giving reports on the company’s financials.

What Is a CFO?

The CFO, as opposed to the controller, is more forward-looking. While the CFO really owns the entire finance function (again, the controller reports to the CFO if there is one ), their main value is in forecasting and strategizing for the future.

CFOs must be able to contribute value across many aspects of the business and financially strategize for each of them. They are also expected to use their financial understanding to know when and how to leverage different business elements to drive growth and revenue.

CFO Duties

Here are the duties a CFO will complete to help their business reach its financial goals:

  • Advise the CEO and other members of the leadership team of the financial implications behind business decisions
  • Help the organization make decisions with an ROI (return on investment) mindset
  • Run analyses of the company’s finances
  • Offer recommendations of the company’s financial opportunities
  • Oversee or execute updates to financial systems
  • Communicate with shareholders and other investors to better understand their expectations for the company
  • Manage the company’s financial teams, accountants, controllers, and tax professionals

Going back to the football analogy, if the CEO is the owner, then the CFO is like the coach — planning, reviewing film, and deciding what to do next. With just a bookkeeper or a controller, the business misses out on key opportunities for growth because of the lack of planning and strategy from the CFO .

For the most part, CFOs will spend their days staying up to date on the progress of current financial objectives. Or, they could work all day on developing a new financial system.

Since CFOs are in an executive position, an outsourced CFO can be just as effective as one that is based at your office building.

What Are the Main Differences Between a Controller and CFO?

Now that we are more familiar with the nuances of their roles, what is the real difference between a controller and a CFO?

The main difference between these two jobs is the range of their focus—CFOs look at the big picture while controllers focus on the minute details of a company’s financial plans.

Another difference between CFOs and controllers lies in who they manage. CFOs are in charge of every employee who works with the company’s finances. Controllers only deal with the teams that develop financial reports—they could either manage these teams or simply be a participant.

Additionally, while the controller is only expected to have a good understanding of the finances of the business, the CFO is expected to also have a good understanding of the business as a whole.

How Do You Know If You Need a CFO or a Controller?

If your company wants to ensure its financial reports are accurate, offer more support to bookkeepers and accountants, and create error-free financial processes, you should hire a controller.

If your company wants to improve collaboration between its financial and executive teams and refine its overarching financial strategy, you should hire a CFO.

Which one should you choose? That entirely depends on the immediate needs of your company. But, if you’re like most companies, you probably have needs in both departments. Fortunately, CFOs and controllers work incredibly well together.

How CFOs and Controllers Can Work Together

While they are separate functions and each is necessary to run a successful business, the CFO and controller work together closely. Without a controller , the CFO may not have accurate financial data to make good decisions. Because their analysis and strategy rely on accurate financials, the CFO is also responsible for the performance of the controller .

While in separate roles, the CFO and controller work closely to realize the vision of the CEO and to drive the business forward. The controller needs to have a great understanding of accounting, GAAP, and best practices. The CFO needs to have a good understanding of the accounting function, as well as finance and business strategy. For this reason, having a good controller isn’t enough for most businesses. Without the experience and expertise a good CFO brings, companies miss out on the strategic and financial planning available.

Likewise, if you have a CFO who is more of a bean counter than a key advisor and strategist, you’re not fully leveraging the finance department of your business.

Get Your Financial Teams In Line

At Ampleo, we provide outsourced CFO services that fit your needs and help you avoid pitfalls, and take advantage of opportunities for growth. If you’re thinking it might be time to hire a CFO, contact us . We’ll help you find out how to improve your financial systems with a new CFO .

GLOSSARY

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Business, finance, and HR terminology explained plainly by people who use it every day.

Glossary

What is a Fractional CFO?

Glossary

What is a Fractional CFO?

Glossary

What is a Fractional CFO?

Glossary

What is a Fractional CFO?

 Let's Build It

You've Got the Vision. 


We've Got the Fractional

Team to Build It.

A fractional CFO who knows your numbers. A fractional CMO driving your pipeline. An HR leader building your people systems. Sales tax specialists keeping you compliant. Valuation experts ready when you need them. All embedded. All executing. All backed by Ampleo Intelligence, our AI platform.

 Let's Build It

You've Got the Vision. 


We've Got the Fractional

Team to Build It.

A fractional CFO who knows your numbers. A fractional CMO driving your pipeline. An HR leader building your people systems. Sales tax specialists keeping you compliant. Valuation experts ready when you need them. All embedded. All executing. All backed by Ampleo Intelligence, our AI platform.

 Let's Build It

You've Got the Vision. 


We've Got the Fractional

Team to Build It.

A fractional CFO who knows your numbers. A fractional CMO driving your pipeline. An HR leader building your people systems. Sales tax specialists keeping you compliant. Valuation experts ready when you need them. All embedded. All executing. All backed by Ampleo Intelligence, our AI platform.

 Let's Build It

You've Got the Vision. 


We've Got the Fractional

Team to Build It.

A fractional CFO who knows your numbers. A fractional CMO driving your pipeline. An HR leader building your people systems. Sales tax specialists keeping you compliant. Valuation experts ready when you need them. All embedded. All executing. All backed by Ampleo Intelligence, our AI platform.