Starting a CFO Advisory Practice vs. an Accounting or Bookkeeping Practice

On this episode of The CFO Project Podcast, Adam Lean and Jeff Prager dive into the key differences between launching a CFO advisory firm and starting a traditional accounting or bookkeeping business. While many professionals default to offering tax or bookkeeping services, they often overlook the more scalable and fulfilling opportunity of CFO advisory work.

You'll discover why the skill sets, client relationships, and business models for advisory services offer greater long-term value—and how to avoid the common pitfalls that come with transactional work. If you're considering starting your own practice or want to transition into higher-value services, this episode is packed with insights to help you make the right choice.

At The CFO Project, we help financial professionals like you master the skills that truly matter—guiding business owners to generate consistent positive cash flow and grow their businesses. If you’re ready to stop doubting yourself and start making an impact, check out our free trainings and resources at TheCFOProject.com. And if you want hands-on mentorship, explore our Done-With-You program. Hit subscribe and turn on notifications so you don’t miss future videos, and let’s help more businesses succeed together!

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Transcript

00:00:00:00 - 00:00:08:18
Unknown
In this episode of the CFO project podcast, we discussed starting a CFO advisory practice versus starting an accounting or bookkeeping practice.

00:00:16:16 - 00:00:27:10
Unknown
Welcome to the CFO project podcast. Today we're talking all about starting a CFO advisory practice versus starting an accounting or bookkeeping practice to help me with the discussion.

00:00:27:11 - 00:00:58:10
Unknown
I've invited Jeff Prager, the other co-founder, the CFO project, to the show. Jeff, welcome. Yeah. So I'm excited about this episode because there's a lot of accountants, whether you're employed accountant, or maybe you have a bookkeeping or accounting firm and you're considering starting a CFO advisory advisory practice. So in this episode, we're going to break down the benefits of starting a CFO advisory practice versus starting an accounting practice or a bookkeeping practice.

00:00:58:12 - 00:01:03:10
Unknown
So you ready to go? I'm ready. All right. So

00:01:03:10 - 00:01:24:10
Unknown
the first benefit that we've identified that Jeff and I have identified of starting a CFO advisory practice versus an accounting or bookkeeping practice, is that with a CFO advisory practice, you're selling something that business owners want, not just need. So, Jeff, why is that a benefit?

00:02:07:10 - 00:02:32:08
Unknown
Yeah. Yeah. And we'll get to price a little bit later on. But I think the key word that you brought up there was value. People will pay handsomely for things that they value. And a lot of people just don't value things that are what they consider necessary evils. Like, I mean, you know, I've told this example before, if there's two gas stations next to each other and one is cheaper than the other.

00:02:32:09 - 00:02:52:08
Unknown
Why would anybody go to the more expensive one? It's because people don't value the differences between the gas, the two different gas stations. They just think it's all the same. But at the same time, bookkeepers, bookkeeping services, tax services, those are things that people need. And so therefore they don't necessarily value who provides it. They just think somebody, anybody can do the box.

00:02:52:08 - 00:03:10:02
Unknown
Anybody could do the taxes. Just get me somebody to do it, because that's something that I don't want to think about. I have more important things to do.

00:03:10:04 - 00:03:33:12
Unknown
Yeah, absolutely. And that's why starting a CFO advisory practices is is better in this standpoint because you're you are selling some of the they want. People will pay for things that they really want. I mean, you know, think about how all the times in your own life that you, you are willing to pay more for something, are you willing to pay more because you want it?

00:03:33:14 - 00:03:56:03
Unknown
It's not just something you need. And business owners need. All right. Excuse me. They really want to have a successful business. Whereas bookkeeping and tax services are recording the past, whether or not you have a successful future is irrelevant. That's their job. Is is to record the past.

00:03:56:04 - 00:04:00:01
Unknown
Yeah.

00:04:00:03 - 00:04:11:07
Unknown
Exactly. It's just expenses. So investment. Yeah. Love it. All right, so the first benefit of starting a CFO advisory practices is that you're selling something that business owners want, not just need.

00:04:11:07 - 00:04:18:04
Unknown
The second benefit is that you're selling something with low competition.

00:04:18:04 - 00:04:27:17
Unknown
So what do we mean by that, Jeff?

00:04:27:19 - 00:04:59:17
Unknown
Yeah.

00:04:59:19 - 00:05:08:00
Unknown
Yeah.

00:05:08:02 - 00:05:37:23
Unknown
Yeah, yeah. I mean, you know, the fact of the matter is, is that in the 70s and 80s, if you wanted to start an accounting firm, you would be competing against the person who owns the accounting firm across the street or downtown. Whereas today you're competing against anybody across the world that has a website that is saying they're selling bookkeeping and tax services, and it's just a crowded marketplace.

00:05:37:23 - 00:06:03:23
Unknown
But even more important, I think, is the threat of future competition from software, from technology companies, from. I, I mean, AI is getting scarily good. I mean, can you imagine a world where I will be able to fill in, put the right numbers in the right boxes, which is really what a tax accountant does, puts the deal, closes and reconciles the books, which is what a bookkeeper does.

00:06:04:03 - 00:06:34:13
Unknown
Of course, that's a reality that that would probably be a reality sooner. Sooner rather than later. But something that that cannot be replaced by technology or AI is a human to human connection, where you're giving, where you're understand in the nuances that a business owner is facing, the nuances of their business and their employees and their customers and their industry, and you're able to give advice in a way that that that the business owner can understand.

00:06:34:14 - 00:07:02:00
Unknown
That is something that can't be replaced. But even more importantly, there's not that much competition for this. This is just simply not.

00:07:02:02 - 00:07:06:07
Unknown
Yeah.

00:07:06:09 - 00:07:12:18
Unknown
Yeah.

00:07:12:20 - 00:07:38:13
Unknown
Yeah. Because because, you know, the average accountant and bookkeeper essentially goes to the marketplace with this message. I can do your books, or I could do your taxes better, faster, cheaper. That's not a compelling value proposition. That's not a compelling message. Whereas, CFO advisors go to the marketplace and say, I can help you have a growing, a successful business.

00:07:38:15 - 00:08:04:10
Unknown
There's a giant difference. Instead of competing with on price or on, you know, on the fact that you're better, you can evaluate that or the fact that you're faster. I mean, who you know, who cares that that's everybody's seen as a crowded message. But but saying I can be somebody you can trust to guide you to not only not fail, but to have a growing and successful business.

00:08:04:12 - 00:08:07:04
Unknown
There's not that many people that can really do that.

00:08:07:04 - 00:08:18:02
Unknown
Everybody listening. If you haven't already, sign up for our five minute weekly email with practical tips for accountants and bookkeepers to escape the accountants trap. Go to the CFO project.com/newsletter.

00:08:18:02 - 00:08:25:06
Unknown
All right. So the third benefit to starting a CFO advisory practice versus an accounting or bookkeeping.

00:08:25:06 - 00:08:27:14
Unknown
So there's very low overhead.

00:08:27:14 - 00:08:50:05
Unknown
Oh this is a good one. What do you what do you think about that Jeff.

00:08:50:07 - 00:09:05:10
Unknown
Yeah.

00:09:05:12 - 00:09:18:09
Unknown
Yeah. SH. Yeah.

00:09:18:11 - 00:09:29:05
Unknown
Yeah.

00:09:29:07 - 00:09:44:02
Unknown
Yeah. That's true. Yeah.

00:09:44:04 - 00:09:48:07
Unknown
Yeah.

00:09:48:08 - 00:10:18:08
Unknown
Yeah. You know, another thought is that, you know, if you're if you're a tax accountant, there's only so many tax returns that you yourself can process. So if you want to grow your business, you have to hire more staff, which creates complexity and overhead. And you know, you have to have office space and you have to do you have to, you know, do all the employee benefits and taxes and, and then that the, the amount of managerial load that you're now placing on yourself the burden of managing those people or, you know, all this is overhead.

00:10:18:13 - 00:10:38:20
Unknown
And because you can't really raise your prices because, again, most people don't want to pay way more for a tax counter, then another tax account is willing to charge. So but with advisory services, if you want to raise your IT, make more money, you can raise your rates because advisory services are very valuable as we talked about earlier.

00:10:38:22 - 00:11:09:11
Unknown
You can charge a lot of money. The average member of the CFO project charges $2,000 a month. It's 24 grand from just one client. Compare that to the average tax return client making what, 758,001 time of year from a client? I mean, it's a it's a no brainer.

00:11:09:13 - 00:11:15:06
Unknown
Yeah.

00:11:15:08 - 00:11:21:08
Unknown
That's true.

00:11:21:10 - 00:11:26:13
Unknown
Yeah.

00:11:26:15 - 00:11:32:15
Unknown
Yeah.

00:11:32:17 - 00:11:35:14
Unknown
Yeah. Love it.

00:11:35:14 - 00:11:49:20
Unknown
right, so the next benefit that I think is interesting that not a lot of people I think, talk about or realize is that with a CFO advisory practice, there's very little liability compared to accounting or bookkeeping.

00:11:49:20 - 00:12:18:08
Unknown
So if you have direct experience with this, what what what do we mean by this?

00:12:18:10 - 00:12:34:11
Unknown
Yeah.

00:12:34:17 - 00:13:08:12
Unknown
Yeah. I mean, because with with CFO advisory work, like you said, we're advising it's up to the client whether to take our advice or not. But with taxes and bookkeeping, we literally are doing something on behalf of the client. And, you know, if you make a mistake, then you're liable. You're liable for that, you know, and that's another reason why we advocate for product CFO services versus fractional CFO services, because there's some actual CFO services that also do something in the business.

00:13:08:12 - 00:13:39:02
Unknown
They may end up signing checks or taking, you know, taking out loan, filing for loans on behalf of the business. And or doing other things in the business. Whereas of what we call a product CFO advisory service, you're just guiding a client using a very structured system every month. It's up to the client to take the advice or not.

00:13:39:04 - 00:14:15:08
Unknown
Right. That's true. That is true. I have absolutely I have several clients that that have both. You know, they obviously hire me as their CFO, advisor. They also have CPAs or and or bookkeepers in their lives. And they they tell me all the time, they, they enjoy our conversations, even though I know they have meetings with their CPAs, they rather they're able to talk about their business holistically with me versus only talking about the the books or the accounting or taxes with those people.

00:14:15:08 - 00:14:17:02
Unknown
all right, so the next benefit

00:14:17:02 - 00:14:23:03
Unknown
is that with CFO Advisory Services, your prices are based on value,

00:14:23:03 - 00:14:29:18
Unknown
not on time or transactional deliverables like taxes or bookkeeping services.

00:14:29:18 - 00:14:43:01
Unknown
So what do you think about that? Jeff?

00:14:43:03 - 00:14:55:18
Unknown
Yeah.

00:14:55:20 - 00:15:41:15
Unknown
Yeah.

00:15:41:17 - 00:15:52:02
Unknown
Yeah.

00:15:52:04 - 00:16:01:21
Unknown
Yeah.

00:16:01:22 - 00:16:32:06
Unknown
Yeah. I mean, this is why there's competition in the bookkeeping and tax space from, like, offshore. These offshore accounting firms or technology or software is because they know that the that that bookkeeping and taxes can be automated more now than ever. And so business owners are going to get more and more used to not having to pay that much money to do their books or to do their taxes.

00:16:32:08 - 00:16:52:23
Unknown
They're not going to want to pay a lot more money for that. And so the value is not there. Whereas CFO Advisory Services, the the value is inherent in the service. You are helping a client, like you said, have a growing and successful business, whether it takes you one hour a month to do that or 100, it almost doesn't matter from a client standpoint.

00:16:52:23 - 00:17:17:06
Unknown
They just know that you're helping them and it's not only it's not only helping them with like with the, the the improvement of their bank account, it's helping them mentally and emotionally. Business owners find value in having somebody that understands the big picture to talk to that somebody that gets it, they can talk to you about everything in their business.

00:17:17:06 - 00:17:37:13
Unknown
Should I rise, raise my prices? Should I buy a truck? Should I have hired the person I hired yesterday? Should I, you know, change the the way I operate? All of these things? Who does a business owner really have to talk to about their whole business? They can't talk to their spouse, their friends or family. They can't talk to their employees for sure.

00:17:37:15 - 00:18:02:08
Unknown
You know, business coaches, some are good. Majority are not so good. But even so, most most business coaches owner our cash flows from a business and how the advice they give impacts cash. And so they could be giving advice that has a negative impact to cash flow. Whereas we as financial professionals are our north stars, ensuring the business is generating consistent positive cash flow.

00:18:02:08 - 00:18:21:00
Unknown
And the business owner knows that. They know that they have somebody in their corner with them. All of that is valuable, incredibly valuable, and business owners will pay for that.

00:18:21:02 - 00:18:35:08
Unknown
Yeah. Right. Totally. Absolutely.

00:18:35:10 - 00:19:03:19
Unknown
Right, exactly. I mean, I was flabbergasted during the Super Bowl, several months ago, you know, a large a large accounting software that we all know took out four ads for ads near the Super Bowl that all had the same theme. You can fire your tax accountant. Because my thought this software is the future. It's easier, it's faster, is cheaper.

00:19:03:21 - 00:19:14:15
Unknown
Remember those same words that I used earlier? Better, faster, cheaper like that is literally what they're advertising. You can't beat the average tax accountant can't beat that. Just can't.

00:19:14:15 - 00:19:15:15
Unknown
The next

00:19:15:15 - 00:19:22:15
Unknown
benefit of starting a CFO advisory practice is that you have consistent revenue year round.

00:19:22:15 - 00:19:34:21
Unknown
So what do we mean by that, Jeff.

00:19:34:23 - 00:19:48:13
Unknown
Yeah.

00:19:48:15 - 00:20:27:02
Unknown
Yeah.

00:20:27:05 - 00:20:37:03
Unknown
Yeah.

00:20:37:04 - 00:20:59:17
Unknown
You know. Totally. I mean, tax account is you get paid once a year from your clients, and and that's. And then you have to hope that the same clients will come back next year. I kind of chuckle because there's an accountant that I, that that my wife and I used to use several years ago. Every year they still send me a we stopped using them.

00:20:59:17 - 00:21:17:22
Unknown
We went to somebody else. But every year they send one of those packets that, you know, client packets. And despite us telling them that we went to another, another, accountant, they're still expecting us to come back. And by the time the time tax season gets here, it's way too late to get a whole new set of clients.

00:21:18:00 - 00:21:42:07
Unknown
And it's it's risky having just year, you know, one seasonality, a seasonality business, which is essentially what taxes is. Whereas we see it for services like you said, we're charging on a monthly basis flat fee. And then and we recommend that you you auto bill like auto draft from you using ACH or credit card from the clients that have invoices them.

00:21:42:08 - 00:21:50:07
Unknown
That way it just comes out of their bank account. You know, like clockwork, you know, the fifth or the 10th of 15th or whatever. Every months, consistent revenue year round.

00:21:50:07 - 00:22:01:01
Unknown
I think for you and I Jeff and for many of our members, the biggest benefit for starting a CFO advisory Service is that you're having way more impact

00:22:01:01 - 00:22:03:08
Unknown
on your clients lives.

00:22:03:13 - 00:22:04:21
Unknown
So what do we mean by that?

00:22:21:06 - 00:22:39:11
Unknown
Yeah.

00:22:39:13 - 00:22:48:05
Unknown
Yeah.

00:22:48:07 - 00:23:05:10
Unknown
I do, yeah, something like that. Yeah.

00:23:05:12 - 00:23:31:06
Unknown
Yeah. Right.

00:23:31:08 - 00:23:51:17
Unknown
Right. Yeah.

00:23:51:18 - 00:23:54:10
Unknown
Yeah.

00:23:54:12 - 00:24:21:17
Unknown
Absolutely. I mean, and. Right. I mean, a tax accountant can do their job perfectly well, and the business may still fail. What's the point? The accountant goes off in the sunset. Well, I did my job. I got my cash, my check. I'm done. But the client's business still fail. Did you really have an impact? No. Because just like you said, the county's job is to record the past that's needed.

00:24:21:18 - 00:24:43:23
Unknown
That's needed job. But I personally want to be able to have an impact, a positive impact on my clients lives. And these are people that own businesses. They're overwhelmed. They're stressed. They they're not necessarily numbers people. In most cases, they're experts at what they do. And so they start a business around what they do. A plumber starts a plumbing business, a chef starts a restaurant.

00:24:43:23 - 00:25:11:18
Unknown
They're experts at their craft, and they're not necessarily experts at numbers and financials, financial matters. And so they need guidance. They need help in order to for them to have a positive future. And we all know that there's one thing that dictates whether a business is going to have a positive future or not, and that is ensuring that the business can generate positive cash flow on a regular basis.

00:25:11:20 - 00:25:30:21
Unknown
Well guess what? That is a financial concept. And so non-financial business owners need a financial person in their life that can help them do that. And therefore if we do it right, we're going to have a very, very positive impact on our clients lives, which of course, they'll they'll keep us around for a lot longer.

00:25:40:13 - 00:25:53:19
Unknown
Yeah.

00:25:53:21 - 00:26:00:10
Unknown
Yeah.

00:26:00:12 - 00:26:35:21
Unknown
Yeah.

00:26:35:23 - 00:27:29:01
Unknown
Yeah.

00:27:29:03 - 00:27:57:16
Unknown
Yeah. 100% of. It, Oh, my goodness. Yeah. I saw a T-shirt the other day that says the H. In accounting, an accountant stands for happiness. I thought it was so funny, but, yeah, you're right, Jeff. Absolutely. So, I mean, for all these reasons, there's. These are the benefits. The these are just a few of the benefits of starting a CFO advisory practice.

00:27:57:16 - 00:28:19:23
Unknown
So I thought this is a great discussion. Thank you, Jeff, for being here. As always. And to everybody listening, thank you so much for listening. And if you haven't already, make sure you sign up for our five minute weekly email with practical tips just for accountants, bookkeepers, and CFOs on how to escape the accountants trap, go to the CFO Project Comm forward slash newsletter.

00:28:20:01 - 00:28:22:21
Unknown
See you next time on the CFO project podcast.