Ooqio Spotlight: Paving the Way for Financial Success with Financial Clarity Consulting

How do you know when your business needs a CFO? When is growing fast a bad thing for your operation? In our latest Ooqio Spotlight, we enlisted Stanislav Zinkov, Principal of Financial Clarity Consulting, to talk through these challenges.

You specialize in part-time CFO solutions. How can a CFO be part time?

Let’s say you’re a small or medium sized company with an annual revenue of between $1 million and $10 million. You have a need for financial expertise and have about 15 hours of work per week to be done.

Most companies will select one of two options: hire a full-time CFO, which leads to overpaying 25 hours every week and likely results in employee dissatisfaction because the work week will inevitably be filled with “other” tasks, or not hire anyone and as the company grows so does the size of the finance-related problems which are not addressed.

I offer a better option: I align with companies based on their needs. If they need 15 hours of expertise per week, that’s the amount of time I dedicate to serve a client and that’s all they pay for. This accomplishes two things. Companies have access to knowledge on demand, and the CFO becomes a variable expense which allows companies to scale up and down based on their immediate and long-term strategic objectives.

That makes sense. When you come in to work with a client, what are some things you typically do right off the bat?

More than half of companies at the time of bankruptcy are profitable. Proper cash flow management is the key. My first objective is to make sure the company will survive. I focus on compliance, processes and cash flow.

I once met with a CEO for the first time and saw that the company had not paid taxes in over a year. I told him to fire his CPA immediately. I serve as the second set of eyes to identify these glaring errors that happen when you don’t have a dedicated financial officer in place.

Another thing I do is to help companies identify how they measure success. It seems simple, but many people measure what they think is success when it really has no bearing on the company’s finances.

Here’s an example: I worked with a clinic that measured success based on the number of patient visits. They had a bonus structure in place for doctors who saw X amount of patients per week. Well, there was no system for identifying if these were cash patients, insurance patients, or anything about the nature of the visit.

Some doctors would invite patients for a complimentary appointment just so they could meet that bonus quota. Not only would the clinic collect no revenue from those visits, they also ended up paying more to those doctors, so this system for measuring success was costing them money. I worked closely with CEO to realign the company’s objectives and Key Performance Indicators, and rewrote the doctors’ compensation packages. In two years we successfully grew one clinic to a network of four — that’s a big win.

I could see how these are the kind of problems that start small, but get exponentially bigger as a company grows.

Exactly. This is where growing too fast can be a bad thing. Many CEOs think you have to be a Fortune 500 company or generating $50 million a year in revenue to require a CFO.

In reality, you need a CFO the minute you start to grow beyond just a handful of employees. Let’s say you have a practice of three doctors in one location. They can pretty much keep an eye on everything without having formal systems in place.

But once you double or triple the operation to a few more locations you’ve also duplicated problems. Things start to fall through the cracks, and the financial impact snowballs. Without systems in place, everyone is doing things their own way without regard to how it impacts the organization as a whole. I work with the CEO to provide the clarity that employees need to do their job well.

Clarity is a big selling point for you – it’s even included in the name of your business.

I call my company ‘Financial Clarity Consulting’ because clients need clarity. With uncertainty, you make decisions with a greater level of risk. You need clarity to make evidence-based decisions for your business.

You also help CEOs make the right hires, which is something we’re focused on at Ooqio in a big way as well. Talk a little bit about that process.

The interesting thing about my position as a part-time CFO is that if I do my job well, I will eventually lose my position. So, I need to prepare a succession plan for my clients toward a full-time CFO, and help them find that perfect person.

Seattle is the most well-read city in the United States. There are a lot of educated people in this town, so it’s easy to find an expert in whatever you’re looking for. But being an expert is not enough to be the right hire; it’s about finding someone who fits your company culture.

If the CEO is not a frequent communicator, then we can’t hire someone who thrives on daily feedback, and so on. We know the technical skills the person must have, but it’s my job to help determine whether they’re going to fit in with the other department heads and employees effectively.

With clarity comes better decisions, both in your finances and your hiring.

Stanislov Zinkov draws on a 15-year background of finance and strategy experience to oversee financing and growth initiatives for a wide variety of clients. To learn more, visit FinancialClarityConsulting.com.

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