By Tom Wadelton, CPA, CGMA, Virtual CFO – Summit CPA Group, a division of Anders CPAs + Advisors
Many CPA firms try to live by George Ainsworth-Land’s guiding principle: “grow or die.”
Ainsworth-Land’s concept of organizational growth is probably enough to put some fire under any firm owner’s feet, but growth doesn’t (or shouldn’t) happen without proper planning. That’s especially true if you want to add virtual CFO services to your firm.
"If your business operates remotely or with a remote-first approach, there are likely many other characteristics about your firm that will play well with offering Virtual CFO Services."
Virtual CFO services are a potentially valuable next step for many CPA firms. But Virtual CFO Services aren’t a fly-by-night service; most accountants or firms aren’t equipped to start offering these services to clients with any efficacy. Our Virtual CFO Playbook and Modern CPA Success Show are some of the best resources available to get started, but before you head there, here are some important signs to measure yourself against that will help you determine if your firm is ready for an upgrade.
Roadsign #1: Your Business Is Remote-First
Having a remote-first business is not a make-or-break requirement for offering Virtual CFO Services. But if your business operates remotely or with a remote-first approach, there are likely many other characteristics about your firm that will play well with offering Virtual CFO Services.
These include, but are not limited to:
- A better understanding of how to engage in a remote environment
- The tech stack built around remote engagement (and an understanding of how to use that technology)
- Efficient workflows developed as a consequence of remote work
Most CPA firms that were still using an in-person model were forced to go remote during the global pandemic. That means there’s a good chance your CPA firm at least understands what remote work looks like. But if you ran back to in-person and in-office work as fast as humanly possible, you may not have the requisite experience and technology needed to effectively work with clients remotely that you’d have if your business maintained its fully-remote status.
Roadsign #2: You Know How to Offer a Deeper Level of Business Analysis
There’s a long road to becoming a CPA. Courses, certifications, stress. It’s an expected part of the process that we all go through. Even still, being a certified CPA doesn’t mean you’re automatically ready to do the deeper level of business analysis that’s required of a Virtual CFO.
"The work of a CFO differs rather significantly from that of a CPA. Many of the same concepts are applied, but there’s a significant extension that goes from past-tense look at a business to a future-tense. "
You’ll find that the work of a CFO differs rather significantly from that of a CPA. Many of the same concepts are applied, but there’s a significant extension that goes from past-tense look at a business to a future-tense. That requires not just a shift in mindset of how to examine a company’s financials but also some additional skills and tech tools you may not have used in the past.
Ask yourself the following questions to get a good idea of whether you’re ready to take on that challenge:
- Are you familiar with business forecasting? Do you know how to do forecasting?
- Can you turn a company’s profitability analysis into a story for a client that will guide them?
- Are you comfortable with and have knowledge about financial modeling?
- Are you comfortable offering business strategy advice on a variety of topics, including how to manage cash flow disruptions, managing overhead, and hiring decisions?
There’s more, but you’ll note that many of these are activities that accountants aren’t commonly asked to do. Particularly when it comes to offering business strategy advice. If you want to add Virtual CFO Services to your firm, you’ll need to be ready to change how you engage with businesses and operate more as a key business partner than just a service provider.
Roadsign #3: You Can or Have Already Narrowed Your Approach to a Few Niche Markets
Focusing on a few or even a single niche market helps establish you as an expert. We’ve found that, quite often, the best way to pick a niche market for your accounting firm is to focus on areas you already know very well.
For example, at Summit Virtual CFO by Anders, we focus on four niche markets: Creative Agencies, Legal Services, Transportation and Logistics, and Cannabis.
By limiting our focus to a few markets, we avoid diluting our resources. The more we work with clients in these niches, the better our understanding of how these businesses work. That makes us a better partner both for our existing clients in these markets and potential clients we may work with in the future.
That’s also a prerequisite for being a CFO. The CFO role requires you to understand and advise businesses on strategy that’s specific to their market. If you are exceptionally knowledgeable about a niche market, you can offer better financial advice to clients within that market. Sprinkle in some effective inbound marketing, and you can become the go-to provider for companies in that niche.
Are You Ready to Add Virtual CFO Services?
Do these road signs reflect your reality as a CPA firm? Do you see yourself adding Virtual CFO Services based on these signals? If so, make sure to take the next step. Take our digital course, The Virtual CFO Playbook: How to Land $60K/year Clients and Provide a Killer Client Experience to start the transformation process from a CPA firm to a ready-to-go Virtual CFO Service.