The answer first
Most small businesses start with a bookkeeper and an external accountant, and that is the right choice. A business needs CFO-level financial leadership when decisions about cash, funding, pricing, controls and growth start to carry real risk, usually well before it can justify a full-time CFO. A fractional CFO provides that senior capability for a set number of days a month.
Bookkeeping records what happened; accounting reports it; a CFO uses it to decide what happens next.
Bookkeeper, accountant, controller, CFO
| Role | Focus | Typical questions answered |
|---|---|---|
| Bookkeeper | Recording transactions | Have all invoices and payments been recorded? |
| Accountant | Accounts, tax and compliance | What were last year's profits and tax? |
| Financial controller | Month-end close, controls, reporting | Are this month's numbers accurate and on time? |
| CFO | Strategy, funding, risk and performance | Can we afford to grow, how do we fund it, and what are the risks? |
Signs you need CFO-level support
- You are surprised by your cash position more than once a quarter.
- You cannot say with confidence which products, customers or locations make money.
- You are preparing to raise funds, borrow, or sell part of the business.
- Your bank asks for forecasts, covenants or management accounts you cannot easily produce.
- Growth is creating payment, inventory or receivables problems.
- The owner is the only person who understands the numbers, and has no time.
- You suspect weaknesses in controls, or have experienced fraud or significant errors.
Key takeawayThe cost of senior finance support is usually smaller than the cost of one poor funding decision, one cash crisis or one undetected fraud.
What a fractional CFO typically does
| Area | Typical work |
|---|---|
| Visibility | Monthly management accounts, KPIs and a board-ready finance pack |
| Cash | Rolling cash flow forecast; working capital management; banking relationships |
| Planning | Budgets, pricing and margin analysis; scenario planning |
| Funding | Financial models, investor and lender materials, due diligence support |
| Controls | Approval limits, segregation of duties, reconciliations and fraud prevention |
| Team | Building and supervising the finance function; choosing systems |
- Agree a clear scope, number of days and outcomes in writing.
- Give access to systems, data and the leadership team.
- Keep bookkeeping and compliance running underneath, so the CFO's time goes on decisions, not data entry.
Self-check: where do you stand?
| Question | If the answer is no |
|---|---|
| Do you receive management accounts within 15 working days of month end? | Tighten the monthly close |
| Do you have a rolling cash flow forecast? | Build a 13-week forecast and update it weekly |
| Do you know your margin by product or customer? | Analyse profitability before pricing decisions |
| Is there a budget the business is measured against? | Set one for the coming year |
| Could you produce a financial model for a bank or investor within a week? | Prepare one before you need it |
| Are key financial controls documented? | Review approval limits and segregation of duties |
How DBMS Global can help
- Bookkeeping, accounts, tax and compliance through DBMS Global: the foundation a CFO relies on.
- RENT-CFO provides fractional CFO and financial leadership: financial oversight, controls, funding support, restructuring and turnaround, and fraud investigations.
- You engage it only when you need it, and the scope and fees are agreed in writing.
Official references
- Hong Kong Institute of Certified Public Accountants, www.hkicpa.org.hk