Managing Risk

September 8, 2015

 

Managing risk is an inherent element of finance. Whether they realize it or not, business owners grapple with the tough trade-offs between risk and return every day. The problem is that most business owners are forced to do this all alone. CFO is genetically wired to help our business owners identify potential risks and to help actively manage them.

First, we can dramatically improve the risk of accounting fraud compared to a typical small business. CFO can provide the critical element of separation of controls. Most small businesses have only one person doing things. At CFO there is one specialist who balances the bank and another who does accounts payable. We have an accountant that reviews the work of the specialists. We have a controller that reviews the work of the accountant. This structure is a dramatic improvement in the risk of fraud allowing the business owner to sleep better at night.

Second, we are constantly evaluating business risk. Part of our responsibility is to continually scan the landscape of our clients’ businesses. We seek to have regular discussions with our clients if we see a risk that may not be addressed adequately.

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