Small businesses don’t have to be big to hire a CFO

When it comes to what type of business needs a chief financial officer (CFO) – the highest-ranking finance professional in an organization – there is no cookie-cutter answer.

Scott Lockwood

“A lot of small businesses with up to 5 to 10 million in revenue don’t have a senior level accounting person like a CFO,” said Scott Lockwood, a partner with Mengel Metzger Barr CPA a public accounting firm headquartered in Rochester with offices in Elmira and Canandaigua as well. “At times we will even come across midsize to large businesses that don’t have a CFO either.”

And yet, the skills a CFO can bring to a business are invaluable and include strategy and forecasting, regulatory compliance, advising, harnessing data to support decision-making, scaling, understanding tax implications, succession planning, raising capital, overseeing environmental, social, and corporate governance reporting standards, and strengthening the overall financial health of the organization.

“CFOs can help businesses navigate opportunities and help them make better business decisions,” said Stephanie Roth, a manager in the outsourced accounting services practice of DKB Business Advisors & CPAs, located on East Broad Street in Rochester. “Especially with companies now employing people all over the country, there are a vast number of compliance issues CFOs can manage.”

A common misconception about CFOs is that they are accountants – most are not. Though CFOs may have a background in accounting or majored in it during college, the Journal of Accountancy reported in January 2022 that just 44% of CFOs are CPAs.

This is because, at the core, the responsibilities of an accountant are different than those of a CFO. Whereas an accountant or a bookkeeper focuses on recording transactions and preparing financial documents, CFOs look at the bigger picture, including a business’s future, from a wide-financial lens.

According to – a technology and startup platform – the average base salary for a CFO in the United States is currently $226,106. When businesses want a CFO in the building, but don’t necessarily have the funds to hire one directly, they do have options, including outsourcing or contracting part-time with a retired CFO.

Remote outsourced CFO services both nationally and overseas have emerged from the COVID-19 pandemic as a more prevalent option, but locally there are some CPA firms like Mengel Metzger Barr, DKB Business Advisors & CPAs, and RDG+Partners that provide these services in a much more individualized, hands-on, and collaborative manner.

“It’s important for a company to find the right fit,” said Lockwood, in describing how a business looking for an outsourced financial professional should go about the process. “You’re lifting up the cover, so to speak, on your business so you should not be afraid to ask around for a referral and to find a person who is the right fit for your organization.”

Overall, Lockwood recommends that business owners and/or leaders choose an outsourced financial professional based on their experience with the industry, personality fit, and responsiveness.

At DKB Business Advisors & CPAs outsourcing clients ranges from startups to mid-sized companies representing a wide mix of industries including healthcare, manufacturing, and retail.

Stephanie Roth

“Outsourcing, from bookkeeping to CFO level services, is not cookie cutter,” Roth said. “We can tailor what our services are based on what the business needs.”

Roth noted that often a finance professional is the last hire for a small business or startup, but that the pandemic and the programs (like PPP Loans) and regulations that went along with it, showed businesses how important a finance professional can be.

“Every small business should have a financial professional working with them,” Roth said. “It is a bit of an investment, but the advantages far exceed the cost.”

Roth began her career in auditing and corporate finance but transitioned to DKB Business Advisors & CPAs in 2017. “What I love about outsourcing is that you really get into the details,” she said. “You help businesses succeed by making better business decisions.”

RDG+Partners, a Rochester-based firm that provides boutique accounting services to assist small-to-medium-sized businesses in the central New York region, also offers outsourcing of CFOs and other financial professionals.

John Rizzo

“It’s important for a business owner to know who the individual is who will be performing the work and who will be supervising them,” said John Rizzo, managing partner of RDG+Partners, which he co-founded with Brian DiGiacco in 2005.

Rizzo explains that one of the many benefits of an outsourced CFO is that there is another layer of management oversight and financial expertise that businesses don’t typically experience with an in-house CFO (who usually only has a CEO above them).

While CFOs are financial leaders, they are not typically financial coaches to the CEO or president of the company. CPA firms that outsource can also provide referrals to niche consulting firms that do executive coaching or other opportunities in this space.

“For a lot of businesses their financial coaching comes from other business owners and they prefer to learn in this way,” said Rizzo, who recommends membership in EO WNY, an international not-for-profit organization with a local chapter of about 50 members.

EO WNY provides training and support for business owners throughout the region. Members must be the owner, founder, or majority stakeholder of a business earning a minimum of $1 million in revenue during the most recent fiscal year.

Caurie Putnam is a Rochester-area freelance writer.

SBA funds start to flow, but there’s more help locally for next round

Even though additional pandemic aid for small businesses was under consideration in Congress this week, that may provide little clarity for small-business owners — especially really small ones — whether they will get the financial assistance they need. 

Perhaps more clear is that funding has started making its way to businesses in the Rochester area and there is plenty of help available for negotiating the application process whenever a new round begins. 

M&T Bank, based in Buffalo, processed more than 27,000 applications from Maryland to Buffalo in the last round, which ran out of money a little more than a week ago. The largest Small Business Administration lender in the area for more than two decades, even M&T was hard pressed to meet the overwhelming demand. 

Dan Burns
Dan Burns

“We went from 300 people assigned to do this work to 2,300 people,” said Dan Burns, Rochester region president for M&T. “I’ve never felt more proud of a group of people in my life.” 

In the Rochester area, the bank won approval for 1,800 Payroll Protection Program loans totaling $440 million. CNB reported that during the last round of funding, it helped 2,502 small businesses with SBA loans totaling  $289.6 million. 

Burns agreed that some particularly small businesses may not have won approval before the window closed. “There are a lot of small businesses that maybe, they’re trying to make ends meet and they don’t have a finance person,” he said. “We’re very hopeful that there will be an agreement in Washington and the window will open back up and we’ll be able to take care of these clients.”

National news reports have slammed some of the larger banks for focusing on businesses that most Americans would not consider small, winning hundreds of millions of dollars for public companies with hundreds of employees. 

The National Federation of Independent Businesses, an advocacy group, is lobbying for an aid package of more than $400 billion, with at least half reserved for companies with 20 or fewer employees. 

At the same time, several financial institutions and advisors have stepped forward to assist businesses with future applications. 

On Friday (April 24) at noon, the Canandaigua Chamber of Commerce will be holding a webinar with Canandaigua National Bank President and CEO Frank Hamlin III and other CNB officials. The topic is how the bank and other financial institutions can help businesses with SBA loans and other aid programs. They also offer advice on managing business finances during this disruptive time. Participants can register at 

RDG+Partners, a Pittsford-based accounting firm, is hosting a free weekly “COVID-19: Stay Strong Webinar Series” on Thursdays at 1:30 p.m. through the end of May. The seminars cover a variety of topics related to applying for federal aid programs. 

John Rizzo, managing partner of the firm, said “Perhaps the greatest challenge is that new information about financial disaster relief initiatives is released every day, and unless business owners are on top of it, they could miss updates that are critical to their success in securing funding.”

Rochester-based Paychex, meanwhile, has announced it will connect interested clients with several online lenders, including Biz2Credit, Fundera, and Lendio, so they can apply quickly when another opportunity arises. 

Martin Mucci
Martin Mucci

 “The fact that $349 billion in Paycheck Protection Program loans were allocated in just over two weeks speaks to the critical financial needs America’s businesses continue to have as they do everything they can to stay afloat during this unprecedented uncertainty due to COVID-19,” said Martin Mucci, Paychex president and CEO.

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