What is your title and what does it mean? How did you earn your title?
I am a Fractional CFO, which means I give small businesses access to financial expertise without the cost of hiring a full-time finance executive. As a Fractional CFO, I have accounting skills and apply that knowledge to big-picture thinking for the future of a business.
In general, CFOs have decades of financial experience and either come from a finance (banking, investment banking, treasury, etc.) or accounting background. My background is in accounting and I’ve been a Certified Public Accountant (CPA) for over 30 years.
How do you help your clients achieve Big Financial Goals?
Small business owners don’t have the benefit of a full team of C-suite executives, so they need advisors to help them scale and grow. As a Fractional CFO, I become a member of my client’s management team, working alongside them to share expertise, provide advise, and share an unbiased outside perspective.
I teach my clients how to get business information from their financial statements, identify methods for measuring and tracking their success, identify methods for measuring and tracking their success, and make informative decisions on how to spend their budget, price their services, and scale their business.
Additionally, I help clients set up healthy financial processes to get their business structure right. Business owners are generally focused on sales and service delivery, while the back office, HR, operations, and finance are an afterthought. It’s critical to have that backbone in place for scale and growth.
What are some of the questions people should ask a Fractional CFO before they officially join their Financial A-Team?
First, ask them a question about your finances and listen to see how well they explain the concept, in layman’s terms. CFOs that use a lot of jargon aren’t necessarily a good resource, even if they know what they’re talking about.
Treat hiring a Fractional CFO like you would hiring an employee. Look at their background, check their references, and ask a lot of questions. Have your Fractional CFO candidate help you define exactly how they will help you, and which responsibilities will be in the scope of services. It is critical that you have a mutual understanding of responsibilities and expectations of the position.
What kind of companies have you worked with and what roles have you had?
I was an auditor in a large public accounting firm, managed financial teams at a large publicly owned company, and was the CFO for a small, privately owned business. In order to acquire a CPA license, the individual must pass a rigorous multi-day test and demonstrate relevant work experience. CPAs are licensed by whichever state they reside in and must attend more than 40 hours of training each year to maintain their certification.
The size of the company is important – large company financial management is very different than small company financial management. Complex Generally Accepted Accounting Principles (GAAP) standards are paramount in a big company, but are not critical to small businesses focused on figuring out profitability, cash flow, and growth. Alternatively, industry experience may not be critical; almost all small businesses keep their books the same way and need to follow the same financial processes to good financial management.
What are some red flags that a Fractional CFO may not be the right fit for someone?
-Their primary need is: client invoicing, paying bills, and recording bank and credit card transactions. They need a good bookkeeper, not a CFO.
-They need to file their taxes. I would refer them to a tax accountant colleague.
-They do not value financial expertise and aren’t interested or see value in looking at the books beyond the minimum it takes to get their taxes done.
-Sometimes you just don’t click, and are not the right fit for each other. The Fractional CFO is a part of your management team, therefore you need a strong rapport with them and compatible work styles.
-A Fractional CFO is a consultant who works with several clients at a time, so if you want someone that is always available, a Fractional CFO might not suit your needs.
Who is on your Financial A-Team?
Having a strong financial bench is critical to me both personally and as a business owner. While I have a lot of financial expertise, I wouldn’t dream of doing it all myself, there are too many complexities too much to work to be done. My bench includes:
- A financial planner/investment manager. This person takes care of my personal investments and helps me plan for my future. Financial planning and investing are complex concepts and getting it wrong can have big consequences, having an expert on my team brings me peace of mind.
- A Banker. Banking seems more like a commodity than a relationship these days but building a relationship with my banker has paid off accessing the right banking products, creative financing ideas and referrals to other business professionals.
- Fellow Fractional CFOs. I network with these folks regularly to stay on top of the industry and discuss ideas with them. What I love about my female colleagues is that most of us prefer to collaborate rather than compete and in doing so we lift each other up. I meet regularly with a group of Female Fractional CFOs who share what they are working on, what their needs are, and tools and resources they use that make business easier. In addition, we all help each other see our blind spots, own our value and build our businesses.
To connect with Jenny Yaeger and learn more about her role as a Fractional CFO, you can email her at firstname.lastname@example.org, connect with her via LinkedIn, Facebook or reach out to her directly on her business website, ClariFi Business Solutions.