Questions To Ask When Hiring a Finance-As-A-Service Firm

7. What’s the Difference Between Accounting and FP&A? 

FP&A stands for financial planning and analysis. FP&A are in-house finance roles responsible for developing forecasts, budgets, and long-term planning of your company’s finances and strategy.

Accounting departments focus mainly on company records, reports, and transactions, and FP&A focuses on the story behind the numbers. The differentiator can be as simple as this, accountants focus on the “what” and the FP&A center on the “why” when it comes to the state of your company’s finances. 

8. Am I going to get what I need from a Finance as a Service company or should I hire a Local Contractor?

With a virtual FaaS firm, you are working with a company that has greatly invested in people, processes, systems, and technology. They know what they’re doing, they utilize modern tools, they are progressive, and they are at the top of their game. Part of their branding adopts values of sustainability and business continuity. 

When you work with a local contractor, they typically lack a support system, modern tools, business continuity, and more. Your options with local contractors tend to be limited. 

9. Why Choose a Virtual Firm over a Local Freelancer?

If you are looking for a firm to do more than just take over your non-core functions, and also want continuity, management, and people strategy, you will want to hire a virtual firm instead of a local freelancer.

10. Can I really afford a Virtual CFO, Controller, Accountant, and Bookkeeper, together? 

You aren’t going to be able to afford everyone, so you need to focus on the stage of your business at a particular time. Eventually, you will need someone with the capabilities to perform in all of these capacities. A FaaS firm will be the best option for you when you hit that point. 

11. I have a CPA, why should I hire a FaaS firm to do my bookkeeping?

A FaaS firm compliments CPAs, especially during the 4-6 months when they are focused on taxes and audits. FaaS firms handle the whole financial value stream, ensuring that you have a doable strategy, plan for all aspects, and make sure that proper implementation happens.

Here is a great article on how we structure our offerings: https://karbonhq.com/resources/start-offering-finance-as-a-service-to-your-clients/

12. What types of reports, KPIs, business intelligence, and proformas, can you help me develop?

We assist in a variety of ways that are essential to your business. 

• We build out multi-year long-range plans that help to inform capital, people, and operational scaling needs.
• We craft your annual operating plan, which is the link between your long-term strategy and your short-term execution. This proforma is essential for helping team members create their yearly goals, which then allows managers to design a compensation plan for best behavior and performance for the year. The annual operating plan is used to measure month-over-month performance.
• We provide an A to B report so that you can review your end-of-the-month financials.
• We can build fully built-out dashboards, synopsis reports, and more. 
• We can build out a 13-week cash flow model for your business.

13. Are you a consultant that will tell me what to do, or will you actually do it?

While part of our onboarding process is much like management consulting, we also provide a discovery, design, and implementation stage. We differ from a management consulting firm because we essentially own the execution and progress of your strategies month after month for years. Basically, we take ownership, we back you up, and we ensure success.

14. I’m a startup, do I need startup accounting services and FP&A?

You don’t need the capabilities, but we can benefit small businesses in a number of ways. Suppose you have trouble understanding where you are making money and losing it, understanding your cash flow, marketing for profit, or how to pay employees for performance. In that case, the capabilities that we provide will help you improve your abilities and understanding in those areas. As for startups, it is important to have a business model or annual operating plan (AOP) for capital raising and for your investor and board of director reporting.

15. Can I use spreadsheets for bookkeeping and budgets?

You absolutely can use your spreadsheets. You can also just use your bank account. It’s possible to manage your business with just spreadsheets and a bank account. Problems arise though when business grows and your transactions become more complex and abundant. Then your bookkeeping will evolve into a chaotic maze that you can’t get out of.

16. Am I going to get charged every time I pick up the phone?

Our business model intentionally keeps our customers in mind. Our goal is to become an extension of your management team, fully embedded in the processes and systems of your business. Our pricing model already takes into account the communication needs of our customers.

In order to have full awareness and ensure that our strategies work for you, we need to be available for you when you need us. To meet that need, the common pricing model of FaaS firms is built around a monthly recurring revenue with a 12-month commitment and limited set-up fees. 

17. My banker is always telling me I need financial help, does your firm have turnaround experience?

We are 4 years out from the beginning of the COVID pandemic in April 2020. Although we have experienced economic expansion, hyperinflation, and rising interest rates, we believe in all likelihood that certain parts of the economy are slowing down, putting pressure on the company's cash flow and financial performance. As a FaaS provider, we understand the importance of managing cash flow, knowing where you're making and losing money, marketing for profit, and compensating employees for performance. While using spreadsheets or bank accounts is a good start, complexities arise as your business grows.

We aim to be an integral part of your management team, offering support without charging every time you pick up the phone. Our pricing model is designed to align with your communication needs, encouraging open dialogue and collaboration.

With a decade of experience in financial services, we are equipped to navigate economic challenges and provide turnaround solutions during periods of slowdown. We focus on accounting systems, cloud accounting, financial management, and rethinking business strategies for companies that are facing financial distress. 

18. What metrics or KPIs do you recommend on the accounting, finance, and strategy side?

Free Cash Flow is the top financial metric for any small business to look at. We analyze your FCF, and then look at your gross margin, which tells you what percentage of revenue is left over. This helps us determine what you can sell, how much you can sell it for, how much you can make it for, and how much you can service. We check out cash efficiency metrics such as working capital, average days outstanding, amount of inventory, number of times inventory is turned, and how they’re keeping up with vendor payables. 

19. Can they help me decide if I need to hire?

Of course! We have three ways to help you decide if you need to hire.

• By helping you to understand your metrics and how to define and model the metrics to make better decisions.
• By helping create HR systems to ensure a solid employee onboarding process, compliance, employee handbook, and an effective payroll system.
• We craft an annual review cycle for you, complete with a compensation framework that is aligned with your overall business goals.

20. How are business strategy, finance, accounting, and HR interconnected?

All of these functions weave together seamlessly, and shouldn’t be disconnected. Accounting feeds finances, finances inform company strategy performance, and the strategy informs HR. Together they create a seamless business flow that allows your business to function in an efficient way. And let's not forget, we also provide tax advisory services to our business customers with our Virtual Tax Manager offering!!

Our team of experts is here to help. Schedule a meeting below.

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