Stern Cohen Partner and Fractional CFO Richard Mendelsohn, CPA, CA, Ph.D explains how fractional CFO services can help business owners grow their revenue and solve 4 common business problems.
Your business is your livelihood. So much depends on its success. As a Chartered Professional Accountant and trusted advisor to business owners, I help my clients with their main goal: growing and preserving their business wealth.
I have been a Partner at Stern Cohen LLP – a public accounting firm in Toronto – for almost 10 years. During this time, I’ve received many calls from clients faced with an unexpected situation that threatens their livelihood. I’ve heard the concern in their voices and the relief when we can help.
In this article, I’ll tackle four common problems that can have a devastating effect on your business. Our goal is to make you aware, and to share a ready solution. I hope this article opens your mind to how fractional CFO services can make a big difference to your business success.
Business owners looking to grow their business from 1 to 2 million, or 10 to 15 million, greatly benefit from full service accounting services. A full service solution includes fractional CFO, tax planning, outsourced bookkeeping, accounting, estate planning and asset protection.
4 Common Business Accounting Problems
1. Key Finance Personnel Turnover
What happens if a key person you rely on for the successful operation of your business wants to retire? We frequently hear from our clients that their bookkeeper, controller, or accountant wants to retire or is moving on. When it’s an unexpected or sudden departure, there’s little or no time to replace them.
This can be a very stressful situation. Most businesses do not have a contingency plan in place to cope with an absent controller or bookkeeper.
In this scenario, business owners are left in the lurch wondering…
- Who will manage our back-end accounting and bookkeeping?
- Who will ensure invoices are issued and paid?
- Who will process payroll and calculate employee commissions?
- Who will take care of HST remittance payments?
- Who will prepare the required monthly financials for the bank?
One solution is to outsource your controller and bookkeeping duties to a trained team under the supervision of a fractional CFO. This smart strategy also frees up the business owner’s time to focus on front line growth, knowing that the back office and finances are in professional hands with experienced CPA’s and tax specialists.
At Stern Cohen, we call our outsourced fractional CFO and bookkeeping service Stern Cohen FIT. FIT stands for Finance Team. We were one of the first mid-sized accounting firms in Toronto to develop and promote this essential service. You can learn more about FIT on this link.
2. Inability to Scale Fast
While it seems like a good problem to have, rapid growth or taking on a large new contract can be a challenge if you don’t have robust financial management processes in place. Without the right bookkeeping and procurement support to scale, you might crash and burn just when you’re about to take off. So who can you trust for back office accounting support?
By working with a fractional CFO and outsourcing non-core functions like accounting and bookkeeping, business owners can move their focus to strategic initiatives, revenue generation and innovation. Outsourcing your back office to professionals enables business owners to be more agile and entrepreneurial-minded.
Look to experts like Stern Cohen for your finance functions when you need to adapt quickly. Why spend the time and money to hire, train and monitor when you can partner with a capable specialist team and leverage our Stern Cohen FIT solution.
3. In Need of Financial Intelligence
Do you ever lie awake at night thinking about the financial health of your business?
- Are you looking for ways to cut costs and increase your profitability, but you don’t know where to start?
- Are you wondering if you are missing out on advantageous (and time sensitive) tax planning opportunities?
- Have you worried that your business might not be tax compliant which could result in costly CRA penalties and interest?
Your business’ financial health is best accessed by a Chartered Professional Accountant (CPA) looking at accurate and up to date bookkeeping and reporting. Having an experienced, trusted finance team with a fractional CFO looking out for you on a regular basis will provide you with insight, answers and much needed sleep. A fractional CFO can check in with you on a regular basis based on your needs. They will dig in to your business’ finances and commit themselves to YOUR success. This is a welcome change for business owners who may only hear from their accountant at year-end, for compliance matters, or reactively if there’s a problem.
In fact, a 2024 survey of Canadian small business owners* found that “nearly half surveyed (43%) have encountered fiscal challenges due to a lack of financial literacy, with 16% noting they have yet to recover.”
*Survey conducted by ResearchScape
4. Outdated Accounting Systems
For many business owners, the pandemic forced an overnight reliance on remote and online business processes. This seismic shift included product and service evolution, pivoting to new markets, and switching to e-commerce sales and payment solutions.
Many business owners were forced to accept that they could no longer operate their business with an outdated back-end accounting system. For these business owners, their location and paper-based accounting, banking, payment and bookkeeping processes were obsolete overnight. While the sudden change to remote work required them to replace their old, legacy systems, the dilemma was finding someone who could guide them and provide the expertise to make these changes.
If you work with an outsourced finance team, you’ll greatly appreciate their industry expertise in a situation like this. At Stern Cohen, our FIT team helps our clients migrate to modern, secure cloud bookkeeping and accounting systems. Reach out to us for a ton of efficiencies when you’re ready to embrace the cloud accounting technologies we recommend like Quickbooks Online, Dext, Plooto and Wagepoint.
Learn more about Fractional CFO services
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Contact us if you’re ready to safeguard and grow your business with Richard’s help!
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Disclaimer: This article is intended to inform readers in general terms. It is not intended to provide any tax or business advice. Please consult your Stern Cohen advisor if you have any questions about your unique situation. While we have tried to ensure the accuracy of the information in this article, we accept no liability for errors or omissions.
