Celebrating Expert Wisdoms from Season One

Speaker A: Welcome to the new F Word podcast where we cut the fluff on business finances and lift the lid on the new F word. The fractional finance revolution. It's a game changer for small businesses. I'm your host, Colin Hewitt, co founder of Float Cash Flow Management for Xero on QuickBooks. We believe that really understanding your business finances makes all the difference in the world. And having a strategic partner like a fractional CFO is the key to unlocking that. Uh, so join us as we dive into personal stories and actionable insights from forward thinking finance leaders and seasoned entrepreneurs to discover why fractional finance leaders have become an irreplaceable part of small business leadership. I've really loved the privilege of speaking with some of the most progressive leaders in small business finance. They've shared their insights and practical advice on how they bring impact to the businesses they work with. Here are some highlights.

Speaker B: My number one thing for you is listen. Technology is how finance scales, right? I've been part of organizations, Colin. You lead organizations. When your business is growing, when float is growing, you're not going to look to your finance leader and be like, hey, go hire more accountants and go hire more finance people. Finance doesn't scale. We scale. And the biggest value that we're going to have in the roles and responsibilities that we do, the value that we bring and the help and guide the future of our organizations. We have to move away from being technology laggers.

Speaker C: We have to remember when we're selling a human service and when we're selling

Speaker D: a tech enabled service or when we're

Speaker C: selling a tech service. And um, you know, that proposal piece really is the initial trust builder, isn't it?

Speaker D: There's usually two ways it goes. One is that, uh, it's all gone horribly wrong. You know, it's been a terrible year. We were always fine and now we're not. And they don't know what to do because they've never really had to pay attention to the figures because they've always been fine. They've made a decent of profit, they've taken the dividends they require and off you go. And then you have one bad year, um, and suddenly the retained profit has decreased and you don't know if you've got enough money to take the dividends you need. It's a bigger issue if you have more than one director or more than one shareholder. Uh, for small agencies with three or four directors, bad year can mean that they literally do not have enough money to pay the dividends. Uh, that year they're hitting that point, it's nearly year end and there's a panic. That's when they call someone like me to see what can be.

Speaker E: We work with the accountant, we'll email the accountant and say, this is the information we need. And so we do offer that, um, and we offer fixed packages for it. And I think it's a good idea because if you're showing consistent value, you don't even have to kind of try and steal the rest of it. The client will come to you after, uh, a period of time and say, look, you're doing all this, you may as well do this bit as well. Or could you have a look at, you know, when you're doing the CFO role, if you see the tax liability is slightly higher than it should be and you mention that they might say, well, could you give me a second opinion on your taxes? And before you know it, you're doing their tax planning as well.

Speaker F: Cash flow forecasting is a super critical tool of me engaging with my clients. And I think you're right. Tax folks are really, really good at taxes, but they don't necessarily have the touch points or the entrepreneurial experience to be able to serve as that, like really good, um, strategic adv advisor when it comes to businesses, when it comes to taxes and being proactive around tax planning, sure. But when it comes to, should I hire this person, should I not hire this person? What happens if I launch this product and it completely tanks? Like, they're just not well equipped for those specific kinds of discussions because they don't have the frame of reference.

Speaker G: So the main thing is educating clients on cash flow so they can make capital allocation decisions, which is the absolute key thing. Um, after they've accounted for cash inflows, outflows, tax outflows, debt outflows, etc. They'll kind of have free cash flows. So what should they use that on? Should they hire another marketing person? Should they look for an acquisition? Should they do something else? And that something else all links back into the strategy of the business, which links back to what I was saying before in terms of strategy, um, being super, super important. And it works in conjunction with finance.

Speaker H: As the business grows, what happens is that the guy who's set up or the woman who's set with these great ideas is working twice as many hours, probably earning half as much as they were before and constantly stressed about cash. Because as the business grows, the working capital, as you know, the requirement just keeps going up and up and up. And because a lot of these Businesses don't have the right financial information then, well, a combination of that and also not knowing they can get it, they don't know where to go and get the proper funding.

Speaker I: They want to get the most out of your title re. And that doesn't involve doing day to day, but then equally adding value to that process can be taking a little bit out of your working day, working time with them and coaching their team, their staff and helping them bring it up level. Because ultimately you can as a CFO and fd, you can't do your role effectively if what's sitting behind you isn't up to par.

Speaker C: The profit and loss in the balance sheet is really only like a quarter of the puzzle. We really need to be looking at KPI reporting cash flow and everything else associated with actually how to make a business run. And with traditional accountants, they have the capacity and the ability to do it, they just don't necessarily offer it as a service. And this is what I mean, they could include it in the price that they're already charging or maybe even as a supplement, but they're not necessarily doing that. And that's why I have a job effectively.

Speaker I: The last few years we've seen, you know, a significant amount of businesses operate in a different capacity that has hybrid and remote. But that's fine. We still know how to drive the relationship side and get people on side and really deliver, uh, our offering in a way that is entirely collaborative. So that was the main piece for us, being able to plug in the right levels for the business. So you give them a sustainable finance team that can grow and evolve as the business does. And when the time's right to transition ourselves away, we can do that and move to more of a hybrid model and go and put the right permanent people in the business.

Speaker A: Colin here. I hope you find some nuggets in season one and I'm really excited to say we're gearing up to bring even more value. Unfiltered conversation and inspiring stories of business growth from the best fractional CFOs, FDs and advisors in season two. So that's coming soon. Sign up for our newsletter to stay in the loop.