3 CFO Practices You Can Start Now
There are some things you should not cheap out on, your money is one of them.
As an owner, you don’t have the luxury of clocking out to go home without worrying about the office until 9am the next day. You wear multiple hats! You’re the owner, the manager, the breadwinner, CEO, CMO, and CFO. Your time is now the most complex thing you have in your life to manage. It’s time to start being proactive about doing so because Hope is Not a Strategy.
CFO is a hat that often gets the shorthand.
It’s easy to hang the CFO hat up to collect dust when you’ve got clients to please, staff to manage, and work of your own that needs done. So, let’s help you spend efficient time under your CFO hat.
Shake the dust off…
Financial Reports are a must
You cannot measure what you cannot see. The efficient CFO is so familiar with their financial reports that they can spot a potential financial flag a mile away and correct it before it impacts their firm. Before you can reach this level of familiarity you must first understand How To Read and Understand Your Financials. The four reports you cannot afford to skip are the Income Statement, Balance Sheet, Budget Variance Report, and Forecasting Report.
Forecasting sets you apart
If this is the first time you’re hearing about a forecasting report (get our free forecasting tool here), you’re going to love this. Every firm has a revenue formula based on the services you offer and the fees that you have set for those services. Don’t tell yourself the lie that your law practice is different and this cannot work for you. It can and we see it work for all types of different firms. If you still have not converted to flat rate fees, read The Billable Hour is a Thing of the Past. Your forecasting report sheds light on your financial future and allows you to plan further ahead and anticipate what’s to come.
Focus on the bigger picture
No one really knows what they’re signing up for when they go into business for themselves. Entrepreneurs are the only people who will work 70 hours a week to avoid working 40 hours a week. The wise CFO views their business as a vessel that is going to help them fulfill a greater purpose. For most, this means exiting their practice and retiring according to their personal and family goals. Optimize your tax positioning, always contribute to your personal retirement, and know when and where to invest both time and money. Here are 3 Things Lawyers Should Know About Retirement Planning.
If you’re interested in learning more about what we do that makes such a massive difference in profitability and overall financial management Contact Us.