Understand that when you’re focusing on what value you are providing for the client, it is not necessarily tied to the fees you are charging and the time you’re going to invest.
It is absolutely possible that a service can take you a lot of time and provide little to no value to the client.
Some examples of this might be handling Accounts Payable and bill payment where a manual process might be in place or the client may want you to move them into an automated process.
Therefore, conducting a full IT implementation to make that transition can take a substantial amount of time and provide little value to the client.
Similarly, it is absolutely possible to provide a service that is high value to the client, but demands a relatively low time input.
When you think about CFO engagements, perhaps the most valuable thing you can give your client is the knowledge, advice, and analysis that you provide at the end of every month, quarter, or year.
Of course, it is critical that the financials are accurate.
Likewise, it is essential that the client actually understands the financials and they know how to read them.
However, the most important thing you can ever provide your client is a list of actions they need to take to achieve a transformation.
Here are some questions to ask yourself when evaluating your client’s engagement:
1. How do they increase their estimates to get better fees?
2. How do they re-negotiate pricing with existing clients to get more out of the deal?
3. How do they restructure their staffing and payroll to pay more reasonable rates?
4. How can they move people from contractor to W-2 without losing money on payroll tax and other benefits?
5. How do they restructure their sales incentives to be able to make better margins and encourage their salespeople to sell products that don’t just have a high price but have a high profit margin?
In a matter of minutes, all of these questions can be explored simply from seeing the financials.
That is really where some of the most valuable advice comes from — not in reconciling every transaction, processing bills, or invoicing clients, but rather in providing the analysis and knowing what to do.
“The most value lies not in doing things, but rather in knowing what to do.”
There are services all across the spectrum that you will choose from as a CFO and it is important to be intentional about your choice.
You may want to provide some substantive accounting because you want the relationship to have a strong foundation and you don’t want to be judged or evaluated simply based on your advice.
You are actually doing technical work as well, which is expected.
However, you want to make sure that you are constantly trying to move into services that provide more value to the client, but require less economic input from you.
Definition: Economic input is the time and money that it costs you to get the value for the client.
You always want to consider how much time and money it takes you personally as the business owner to get results for your client, be it the time it takes to acquire the information, get the reporting from the client, or give advice to the client.
To learn more about becoming a CFO, check out our CFO Templates below!