Two vital questions must be answered when deciding between DIY and hiring a pro. These questions apply across the board, from home repairs to developing your GovCon’s financial management strategy:
- Do you have the skill sets needed to produce good results?
- If performed incorrectly, could your actions have serious negative consequences?
For many small and mid-sized government contractors, in-house staff may suffice for handling financial management in the startup phase. Your office administrator processes invoices and payroll. The operations manager exports project reports from your enterprise resource planning (ERP) software for your project managers and customers.
Sweat Equity vs. Executive Expertise
At this stage, you reap some “sweat equity” advantages from financial DIY, including lower payroll and less overhead. As your business grows and you scale up for success, however, DIY can lead to adverse outcomes. Lack of experienced executive guidance means that no one is taking in the big financial picture across your enterprise and developing an appropriate strategy.
Your GovCon is not alone if you face this dilemma: You recognize that your DIY approach could soon lead to impacted margins, audit risks, and barriers to growth. Meanwhile, your budget can’t stretch to cover standing up a full financial team, particularly CFO-level leadership. CAVU’s in-house GovCon experts can help you solve your dilemma with outsourced Strategic CFO Services. Your company gains scalable executive expertise customized to meet your current and future market needs.
Five Signals to Call in CFO Services
The following red flags can signal your GovCon is ready for CFO-level guidance:
- Increasingly Expensive Errors
Bookkeeping mistakes and missed billings can add up to inconsistent and erroneous financials. Misclassified or unaccrued expenses can distort contract profitability, trigger contract underbilling, or create audit exceptions that require additional reviews and restatements to resolve. The risk of human error inherent in DIY financial management can snowball into mounting downstream costs.
- Hidden Compliance Risks
Compliance with FAR cost principles, Cost Accounting Standards, and DCAA regulations are non-negotiables for GovCons. Small gaps in allocability, allowability, or documentation can lead to audit findings that affect your company’s bottom line, impact your reputation with government regulators and clients, and skew your strategy for the future. Outsourcing CFO guidance can be a bargain compared with the cost of remediating findings, defending an audit, or losing contract eligibility.
- Weak Insights + Missed Decisions = Steep Opportunity Costs
Strategic analysis should elevate your firm’s finances beyond completing day-to-day tasks like payroll and invoicing. When staff spends their time on these siloed operations, there’s no bandwidth for forecasting, rate modeling, or scenario analysis. If your firm wants to master competitive pricing, profitable bids, and scaling for the market, you need a strategy informed by accurate decision support. CFO leadership can guide forecasting discipline, cash-flow planning, and pricing intelligence to apply accounting numbers into a long-view plan for profitability.
- Rising Process Debt
When financial operations are scattered throughout your enterprise and based largely on spreadsheets and tribal knowledge, process debt can creep in. These include inconsistent financial closing practices, decentralized files, and ERP configurations that do not reflect GovCon regulations or your company’s best strategies. Addressing process debt after the fact by migrating systems, cleaning data, and retraining staff is expensive and time-consuming. A CFO advisor can help standardize processes and optimize systems to transform your financial analysis platform into a strategic asset.
- Scalability Risks
DIY finance leaves your GovCon vulnerable to the inevitable business shifts and challenges. What do you do when a member of your admin staff who handles a key financial function leaves your company? How do you scale up to handle a large cost-reimbursable contract with scattered financial functions? CAVU’s proactive Strategic CFO Services can build staffing plans, role definitions, and finance capabilities so growth does not outpace competency. We maintain a bench of financial experts who can keep your firm nimble and ready to shift strategy when market conditions warrant.
Move from Firefighting to Effective Decision-Making
CAVU’s Strategic CFO Services provide compliance know-how, financial planning and analysis (FP&A) expertise, rate modeling, and board-level financial strategy so your staff can step back from reactive firefighting to benefit from effective decision-making.
Contact us for an introduction at your convenience to customized CFO services, outsourced FP&A, and other options from our GovCon financial and accounting experts