“I can’t afford it,” are some very dreaded words.  But we aren’t talking about a new car or special outfit here, or even a gourmet pie.  This is about your company’s finances.

What do you do when you can’t afford a high-dollar CFO but you need one?

You’ve come to the conclusion you need help with your company’s finances.  It’s grown beyond your ability to handle it and your current staff’s capabilities.  However, you still need to keep a handle on it and need to be able to delegate the responsibility. You’ve made a list of what you need in this new super hero with a green eye shade—but you’ve also looked at your budget. And you want them to either do, manager or oversee:

• The accounting function.
• Bookkeeping
• Payroll.
• Human Resources.
• Other tactical things related to your company’s finances.
• Oh, and throw in some strategy…

Hmmm…it works out that if you hired a W-2 employee with that skill set it would cost you easily $200k.  Here, let’s go diving in the couch cushions to see if you have that lying around…

Wait…what about outsourcing?  For a fraction of the cost (and without the overhead) you could have a talented, experienced and strategic CFO sitting next to you.

By outsourcing you buy that fraction of the talent you need and not the  whole person.  That’s not to say you will only get a fraction of the service.  Most fractional service providers (contractors) work by the project or offer specified services for a fee or packaged price.  That allows for a smaller company to have access to extreme talent for a fraction (and an affordable) price.

For more on how to manage your finances fractionally, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

*photos courtesy of Unsplash (Hugo Aitken and Ibrahim Boran, photographers)

Or, why you need to seek approval to get things done inside an organization.

Now, don’t get defensive and listen to Aretha and call it a “Chain of Fools!”

Really.  It’s not about giving up anything.  Actually, it is about maintaining order and ensuring that things get paid or processed and the left hand knows what the right hand is doing. Besides, having approvals for payments and spending authorizations ensures that money is going where management (that most likely is you) wants it to go.  And according to some kind of strategic plan.

Here are some key reasons to have a chain of command, or hierarchy, within your company, particularly when it comes to all things financial. It:

• Sets expectations at every level.
• Helps employees understand who to turn to when they need help.
• Clarifies roles for every employee and defines what they can—and cannot—do.
• Makes clear who has the last word (who is ultimately in charge).
• Defines the shape of the organization both structurally and culturally.

When it comes to finance, having a clear path to approval for spending and budget allocation becomes even more critical.  Having an organization structure ensures:

• Who sets budgets and authorizes spending.
• How much any given manager or employee can spend of the company’s money in the scope of their job.
• An audit trail for when, who and how much is spent.

Every organization, no matter how large or small, has a structure or should have a structure.  Use what you have to ensure accountability and traceability.  It will ensure you make money and get to keep more of it if everyone involved knows what they should be doing.

For more on how to manage your finances, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

*photos courtesy of Unsplash (Eyatsu Etsub, photographer; and Museums Victoria); Aretha Franklin courtesy Atlantic Records and the Detroit Free Press

Margins, that is.  Sure, they are the white space on a printed page around the text. But more importantly, they are the best way to measure profitability in your company.

You really need to be aware of your margins.  It represents the percentage of sales you’ve turned into profit, or, put more simply, how many pennies you made on each dollar of sales.

Keep in mind there are several types of margins:

• Gross profit
• Operating profit
• Tax profit
• Net profit

All of these are reflected on a company’s income statement.

Gross margin is what’s left after subtracting direct costs of the product or service from the sales revenue.

Operating profit or margin is what’s left after subtracting operating costs from gross margin.

Then pre-tax margin results when debt costs and unusual charges are deducted from operating profit.

Deducting taxes from that number results in the net profit margin.

It’s part of a larger process, but an important statistic (or set of statistics) to track. Without profitability, your company runs in the red.

Make sure those white spaces are wide!

For more on how to manage your finances, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

*photos courtesy of Unsplash: Frank Busch, photographer) and Paul Maynard

ZZ Top said it best and it continues to be a major theme in business.  If you provide goods and/or services, you need to be paid for them.

These days there are more ways to be paid beyond cash and checks.  Peer-to-peer payment apps and systems are taking over this space. What is available, and which one should you use?

First, let’s make a list.  Here are a few of the top systems out there:

• ACH
• CashApp
• Facebook Messenger
• GooglePay
• PayPal
• Venmo
• Zelle

ACH or automated clearing house, is a network that coordinates electronic payments and automated money transfers. Use it to move money between banks. There may be a fee.

CashApp is just that: an app on your phone.  It is a service offered by credit card processor Square. It has a maximum transfer amount of US$7,500.

Facebook Messenger is new to the payment space and relies on its users having a Facebook profile. However, it may take up to five business days to receive payment.

Google Pay is popular because of the search engine and its accessibility.  Integrates well with Gmail but can take up to 24 hours to receive payment.

PayPal is the original payment system.  Once acquired and then sold by eBay, it allows for fee-free transfers (between PayPal accounts) to family members.  However, if you have a business account, expect fees up to 3.5%.

While owned by PayPal, Venmo is a separate platform.  It is best for reimbursing your friends after a shared dinner or as a way to get cash to someone quickly.  No fees if you can wait more than a day. But you can only send money via the app.

Offered by the big banks including Wells Fargo and Chase, Zelle is a way to send cash from account to account on the same day without a fee.  You can use either your desktop or smartphone.

Are you responsible for payables at your company or just want to be paid as an individual or contractor?  Consider one of these options. As with any service, product or offering, there is no one-size fits all: check out demos, read up and consider a trial before buying or downloading.

For more on how to manage your finances, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

*photos courtesy of Unsplash (Nathan Dumlao and David Dvoracek, photographers)

Someone has to keep track of the “numbers” at your company and it looks like it is you!

Where does one start when it comes to choosing and then implementing an accounting and bookkeeping software package? With so many options to choose from, what attributes should I consider? Here are a few things to consider when choosing a software package:

• Features
• Usability
• Cost

Features.  What do you need it to do? Is this about receivables and payables? What kind of reports should it generate? Should it track inventory, payroll and project management?

Usability.  Can it be accessed from anywhere (cloud based) or is it a desktop-only package? How many users can access it at one time? Is there a mobile app version of it?

And cost.  Can you only afford a low-cost basic package, or can you ante up for something deep with features?

What are the advantages to using an accounting software package?

• Saving time.
• Being more accurate.
• Putting all financial tasks in one place.
• Reducing costs (see time savings above).

So, what’s available and how much should I be prepared to spend? Here’s a list of the most popular packages out there (in no particular ranked order):

• AccountEdge Pro
• FreshBooks
• GoDaddy
• Quickbooks
• Sage Business Cloud Accounting
• Wave Accounting
• Xero
• Zoho Books.

As with any service, product or offering, there is no one-size fits all: check out demos, read up and consider a trial before buying.

Do you do your own accounting internally using a third-party software package?  Are you up to managing this process efficiently?  If not, you should consider outsourcing your accounting needs to a third-party provider.  TFO Solutions is just such a company.

For more on how to manage your finances, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

*photos courtesy of Unsplash (Kelly Sikkema and Sigmund Quusek, photographers)