Should Fractional CFOs Offer Bookkeeping? (The answer!)

Summary

In this insightful discussion, the host and Matt Tate, CEO of Desmal, explore the dynamics between fractional CFOs and bookkeeping. They delve into the importance of focusing on core competencies rather than diversifying services, which can dilute a company's value. Tate emphasizes the distinction between high-level advisory work and operational tasks like bookkeeping, advocating for deep expertise in specific areas. The conversation uncovers hard-learned lessons in business, effective communication, and the strategic approach to scaling a business while maintaining a strong client relationship.

Takeaways

• 📊 Specialization is crucial for professional service businesses; Matt Tate emphasizes the importance of focusing on core competencies to maintain efficacy and value.
• 🔍 Matt discusses the dilution of value when businesses expand beyond their core services, advocating for going deep into a specific skill set rather than spreading thin.
• 🛠 The conversation highlights the different management skills required for high-level strategic thinking versus day-to-day bookkeeping operations.
• 🤝 The importance of partnership between fractional CFOs and bookkeepers is underscored, with a focus on open communication and mutual respect for each party's expertise.
• 🚀 Matt shares insights on scaling a business, stressing the need for systemization, process creation, and team empowerment to handle growth effectively.
• 🔄 The transcript reveals the challenges of maintaining a strong company culture in a remote or hybrid work environment and the deliberate steps taken to foster a cohesive team.
• 🤔 Matt admits his impatience as a challenge in business, reflecting on the difficulties of change and the time it takes to implement effective processes within a company.
• 🔑 The concept of 'bad revenue' is introduced, referring to income that doesn't align with the business's highest value offerings, which can detract from overall success.
• 💡 The interviewee shares personal experiences, such as being an engineer and a leader, to illustrate the importance of aligning leadership style with team needs and processes.
• 🗓️ The necessity of setting clear scope of work and maintaining strict adherence to it is discussed, to prevent scope creep and ensure efficient service delivery.
• 💼 The transcript touches on the role of a CEO in sales, stating that initial sales should be led by the CEO to establish a solid foundation before delegating to a sales team.

Q & A

What is the main topic of discussion in the conversation between the host and Matt Tate?

The main topic of discussion is the role of fractional CFOs in offering bookkeeping services and the importance of focusing on core competencies within a professional services company.

Why does Matt Tate believe that fractional CFOs should not offer bookkeeping services?

Matt Tate believes that fractional CFOs should not offer bookkeeping services because it dilutes their efficacy and value, as bookkeeping requires different skill sets and management styles than high-level advisory work.

What does Matt Tate suggest as an alternative to offering multiple services that may not be a company's core competency?

Matt Tate suggests going vertical by finding a specific skill set or vertical niche in which the company is uniquely good at and focusing deeply on that to provide maximum value.

What is Matt Tate's view on the concept of 'bad revenue' in a business context?

Matt Tate views 'bad revenue' as revenue generated from services that do not align with the company's highest best use or core competency, which can lead to inefficiencies and reduced value for clients.

How does Matt Tate define the difference between managing a team of fractional CFOs and a team of bookkeepers?

Matt Tate defines the difference as managing a team of high-level thinkers versus managing a team of process people, where each team requires different management mechanics and skill sets.

What is Matt Tate's perspective on the joy and satisfaction that finance professionals derive from their work?

Matt Tate believes that many finance professionals do not find joy in the nitty-gritty of bookkeeping and backward-looking accounting, which can affect their performance and the quality of service they provide.

How does Matt Tate approach the issue of scalability in his bookkeeping firm, Deasil?

Matt Tate focuses on creating scalable processes and policies that allow the firm to maintain high-quality service as it scales, rather than scaling individual people's brainpower.

What does Matt Tate consider essential for creating exceptional and scalable services in a business?

Matt Tate believes that to create exceptional and scalable services, a business must have a team that loves doing the work and finds joy in it, and leaders who are deeply involved in the processes to ensure quality and remove the hard parts.

How does Matt Tate view the importance of systemization and process in providing consistent quality in services?

Matt Tate views systemization and process as crucial for ensuring consistent quality in services, allowing the business to scale effectively while maintaining a high standard of output.

What is Matt Tate's philosophy on the depth of processes in a business?

Matt Tate's philosophy lies in the middle of the spectrum, advocating for simplicity in processes while ensuring they are detailed enough to consistently produce quality output, following the KISS principle (Keep It Simple, Stupid).

How does Matt Tate address the issue of responsiveness in client communications within his company?

Matt Tate addresses responsiveness by setting a standard of under two-hour response time and under 24-hour handle time, using a shared inbox system to track and manage response times, and fostering a culture of respect and acknowledgment.

What is the key takeaway from Matt Tate's discussion on the importance of partnerships between fractional CFOs and bookkeepers?

The key takeaway is that partnerships should be based on mutual respect, open communication, and a shared goal of improving the client's experience, rather than a hierarchical relationship where one party is seen as superior.

What challenges does Matt Tate face as the CEO of a rapidly growing company?

Matt Tate faces the challenge of managing his own impatience and the desire for quick change, as well as the need to ensure that his leadership team effectively filters and manages his feedback and ideas.

How does Matt Tate handle the issue of scope creep in his business?

Matt Tate handles scope creep by being intentional about breaking the scope slightly when it strategically benefits the relationship or the client, while also maintaining strict adherence to the defined scope of work.

What advice does Matt Tate give to CEOs who struggle with the idea of being a salesperson?

Matt Tate advises CEOs to embrace the role of a salesperson, practice their sales pitch, learn from doing, and be curious about improving their sales skills, as sales is an essential part of running a business.

How does Matt Tate view the role of a CEO in the sales process of a growing business?

Matt Tate believes that the CEO should personally be involved in the sales process, especially in the early stages, to understand the client's needs and create a playbook that can be used to train others.