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

November 14, 2019

Keeping proper books and tracking your finances are imperative for businesses. There’s no getting around it. In fact, awareness and upkeep of finances are such an essential component of running a business, that many hire a firm to take care of these services for them. 

20 Questions to Ask When Hiring Finance-as-a-Service Firm
20 Questions to Ask When Hiring Finance-as-a-Service Firm

While it can be a relief to be able to hand the tedious and difficult work of dealing with your finances over to someone else, it can also be nerve-wracking.

So how in the world do you navigate the financial terrain of business? We’ve created a list of 20 questions that you should ask in order to determine whether hiring a finance-as-a-service firm is right for you.

1. When Do I Really Need a CFO?

Let’s face it. There comes a time in most businesses when the owner spends most of their time hovering over spreadsheets instead of with customers, working in the business instead of on the business, and just overly consumed by details and finances. When that time comes, it’s a good indicator that you need someone supporting you.When Do You Really Need A CFO?

2. Why Do I Need A CFO?

Having a lack of clarity and confidence in your business’ financial situation can be incredibly stressful. Hiring a Chief Financial Officer (CFO), provides you confidence knowing your finances will have oversight, it gives you operational alignment, strategy, and planning. Essentially, a CFO will set your mind at ease and pave a clear financial path for your business.

3. Why shouldn’t I just hire an accountant- Can’t I just hire an accountant?

Strategic and financial planning requires much more than just accounting, it requires years of experience beyond just numbers. It’s important to remember that business planning is not based on tax planning, but tax planning is based on business planning. You need more than just an accountant. 

4. What’s the difference between business bookkeeping and what my CPA does?

Business accounting and bookkeeping focus on providing support to management and help in decision making, while the role of a Certified Public Accountant (CPA) is to focus on bookkeeping for the purpose of preparing tax compliance. 

Business accounting firms are essentially organic services that are built from the ground up and designed to serve the whole of a business’s financial side. Their focus is to deliver financial reporting and bookkeeping processes, rigorously working with the financial processes of the business, while a CPA’s sole focus for 4-6 months of the year is strictly tax preparation.

5. Can I really afford not to have an accounting and finance team?

While there are a number of businesses that do fine managing their own finances through bank accounts and point of sale services, hiring an accounting and finance team provides a vast amount of benefits- like taking the burden out of your hands. 

If you would like to translate business strategy and financial performance to external constitutes, you will need an accounting team to capture historicals for comparison and compliance reasons. If you would like to translate them to potential bankers and investors, having strong financial acumen really backs you up and supports your storytelling.

6. How critical is financial management and accounting for my business strategy?

Business strategy is basically the map of your business highlighting where you’re headed and how to get there. Financial management and accounting are imperative for business strategy because they make up huge portions of that map. 

With financial management, you are defining your performance metrics and translating them to your strategic goals. Accounting is used to capture the data so that you are able to measure your defined metrics. 

Strategic Goal planning

7. What’s the difference between accounting and FP&A? What is FP&A

FP&A stands for financial planning and analysis, FP&A are in house finance roles responsible for communicating with higher ups about the of your company’s finances. 

Accounting departments focus mainly on company records, reports, and transactions, while FP&A focus 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 virtual FaaS 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 CFO controller, accountant, and a bookkeeper, together? When should I partner with a FaaS firm?

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 do I need to hire a FaaS firm?

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

12. What types of reports, KPIs, business intelligence, 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. Contact us for more specifics on the types of KPIs and reports we can develop for you.

13. Are you a consultant that’s going to tell me what to do, or are you going to 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.

On board Process

14. I’m a small business, do I really need these capabilities?

You don’t really need the capabilities, but we are able to benefit small businesses in a number of ways. If 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, then the capabilities that we provide will help you improve your abilities and understanding in those areas.

15. Can I just use my spreadsheet?

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 increases and your transactions become 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 clients in mind. Our goal is to become an extension of your management team, fully embedded in the processes and systems of your business. That means that we need to be available for our customers as any member of their team would be. Our pricing model already takes into account the communication needs of our clients.

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 in our 10th year of economic expansion and believe in all likelihood that certain parts of the economy will begin to slow down, putting pressure on companies cash flow and financial performance. Fortunately, our company has over 10 years of experience in turnaround and restructuring. We focus on accounting systems, financial management, and rethinking business strategy for companies that are facing financial distress

18. What numbers do you recommend, both on the accounting, finance, and strategy side?

Free Cash Flow is the top metric and financial number for any business owner 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 it for. 

We are also able to determine where each company should be spending their time in operational efficiencies and vendor management.  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 frankly 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 streamlined way. 

Hiring a FaaS firm to help you is likely the decision you need to make in order to move into the fullness of success for your business. There is definitely a lot to consider, but the choice to do it may be exactly what you need for your company’s next stage.

About GrowthLab

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